One of the best recruiting and retention tools that LifeLock, Inc., has at its disposal is a 401(k) plan—with immediate eligibility, an immediate match, and no vesting schedule, says Natalie Dopp, SPHR, CCP, vice president, Human Resources. “This is very unique.”
All employees are eligible for the 401(k) plan on day one of employment with the Tempe, Arizona-based company, a provider of proactive identity theft protection services.
LifeLock automatically enrolls its new-hires in the 401(k) plan at 1 percent and increases the employee contribution “by 1 percent annually unless they opt out,” Dopp says. So, for example, in the first year of employment, an employee would automatically contribute 1 percent of pay to the 401(k) plan; that contribution would increase to 2 percent the following year, and so on.
Any of LifeLock’s 463 employees can voluntarily increase their contribution at any time—up to 6 percent of pay annually.
No matter what the level of employee contribution, LifeLock’s match is more than 100 percent. For employees who contribute 1 percent, the company contributes 1.3 percent, Dopp says. “If you contribute 6 percent, we match 8 percent.”
In addition to helping bolster LifeLock’s recruiting and retention efforts, Dopp says the 401(k) plan has demonstrated the company’s willingness to invest in its employees and has increased employee satisfaction.
The decision to offer such a generous 401(k) plan is consistent with LifeLock CEO Todd Davis’ philosophy of doing what is right for employees and his goal of making the company one of the top employers in the state, says Dopp.
That philosophy has paid off. Founded only 5 years ago, LifeLock was recently named a winner in the inaugural Arizona’s Most Admired Companies Awards sponsored by Arizona Business Magazine and BestCompaniesAZ.
Dopp attributes the award to LifeLock’s culture “and the way we treat our employees,” including the competitive salaries and generous benefits that employees receive, such as 100-percent employer-paid medical premiums for employees, 28 paid days off per year (to be used at an employee’s discretion), and 3 paid days off per year for volunteering.
Getting the Word Out
In the past, LifeLock has primarily educated its employees about the 401(k) plan during the recruiting, onboarding, and open enrollment processes. For example, applicants learn about the plan, what opportunities employees have to invest in their future, and how the company invests in it, she says. During an in-depth discussion of employee benefits, new-hires are told about automatic enrollment in the 401(k) plan, how to increase employee contributions, and available investment options.
Starting in January, the company also plans to offer brown bag lunches for its 300 call center employees in an effort to better educate them about the value of saving for retirement, budgeting, living within their means, and the tools available to help them do that, Dopp says.
Advantages of Auto-Enrollment
Dopp is an advocate for automatic enrollment and says it has helped LifeLock achieve a participation rate of more than 90 percent in the 401(k) plan. That rate, she says, is “pretty high,” especially considering that about 50 percent of LifeLock’s workforce is employed in entry-level positions.
Automatic enrollment has helped some employees realize the long-term value of this benefit, especially those who had not contributed to a 401(k) plan in the past, Dopp says. For example, when employees receive quarterly statements from a third-party vendor or when they inquire about making a hardship withdrawal or securing loans from the 401(k) plan, they see how quickly their investment—and the company’s match—has compounded over time.
Access to those funds has, in turn, provided financial stability to some employees impacted by the economy, she says. “It really hashelped some of our employees during this time.”
What to Do
Dopp offers the following advice for employers to consider when offering a 401(k) plan:
Use automatic enrollment. This helps employees prepare for their future and realize the long-term value of contributing to a 401(k) plan.
Provide an employer match. By doing so, employers demonstrate the importance of saving for retirement and the company’s willingness to invest in its employees and their future.
Leverage vendor resources. Create a strong partnership with your third-party vendor and use available resources to help educate employees about your 401(k) plan. Vendors may be able to provide monthly newsletters, to visit your facility and speak with groups of employees, provide them with financial information and advice, and meet one-on-one to discuss their particular financial situations.