Interview with Carl Gagnon, AVP, Global Financial Well-being & Retirement Programs, UNUM Group.

DC Institute: Describe your current plan?

Carl: Unum provides eligible employees the opportunity to save for their future through a 401(k) retirement plan. This includes a company matching contribution (dollar for dollar on the first 5% of employee contributions), as well as an automatic 4.5% defined contribution (DC), and an additional transition contribution if the employee met the eligibility requirements set on December 31, 2013.  For employees contributing to the company matching level, employees receive an additional 9.5% from Unum. 

The Unum 401(k) plan provides for automatic enrollment for new hires and rehires as an easy way to save for retirement on a pre-tax basis.

DC Institute: What issues are you currently facing with your DC plans, and what’s your strategy for tackling them?

Carl: Here at Unum we have put together what we think is a competitive offering in our 401(k) and DC plan, especially when benchmarked against our peer and strategic group. It’s not a case of plan design or the governance and compliance matters, although we certainly do monitor that; currently we have turned the scope inward and focus on the questions that we ask ourselves, which are:

• How do we encourage our employees to be more mindful of financial wellbeing? Offering a good 401(k) is the first step.
• How do we help our employees understand their financial wellbeing? It’s easy for people to participate, auto enroll and many do enroll at a healthy rate. Currently the company’s DC & matching contributions are strong, and our program is designed to help our employees save for their future.   One goal we have is to help our employees save for the future, including their retirement.   
• How do we get people to deal with the financial issues that they may face, such as budgeting concerns?  How do we get them to deal with debt and debt management in the short and long term? These are the things we are looking at, and developing now.

DC Institute: How are you reacting to these inputs and what is your implementation plan for these priorities?

Carl: We have just announced a new student debt program that we will be rolling out in 2020. This innovative initiative enables employees to trade back a percentage of their accrued paid time off (PTO) to the company. Participants will then be able to sign in to a joint Unum and Fidelity website where they can take the value of that “traded” PTO and apply it towards paying down their student loan debt. I will be speaking more on this specific topic at DC Institute’s Chicago meeting in April.

We are also in the process of reporting from a recently completed pilot program at one of our divisions, Colonial Life, that attempts to quantify employee wellbeing.  From that pilot program, this year we are launching what we are calling a ‘Total Wellbeing Index’. The index asks a series of questions of our employees in four streams: health, life, work and financial. By engaging in this platform and answering a number of predetermined questions, our employees are placed on a score matrix and are then able to compare themselves to other participants in their geographic area, pay range, age, gender and other key demographics. For example, employees can use the score matrix as a tool during annual enrollment to choose programs and make choices that may help them improve that score.

Unum will use this data to develop additional financial wellbeing resources and pro-wellbeing educational programs, which address some of the areas where scores are lower, and interest is higher from an employee engagement perspective. This will give us a tool to measure the total wellbeing of our employees in those four domains.

DC Institute: What is the underlying philosophy when looking at creating new initiatives for your plan?

Carl: To offer a total global reward program whether that be in the U.S., UK, or Ireland; a program that keeps us competitive and offers employees a variety of informed choice within our benefits and compensation programs and that allows employees to meet their ever-changing and differing needs.

An example of this would be my needs as a Baby Boomer, my career stage, and my age; these will be significantly different from other generations. Therefore, it is trying to build that type of choice within our programs so that we can better meet the wider needs of our employees.

DC Institute: What is your next mountain to climb in terms of the plan?

Carl: We continue to evaluate and refine our total wellbeing offering as a team.   On the immediate horizon, we’re particularly interested in employee feedback about the student debt initiative. We want to understand who is taking advantage program, their motivations, how they value their PTO, and other key insights. Longer term, for those who don’t have student loan debt, could we expand options on how to “trade” in their PTO? This is an exciting time for us to evaluate program data to make a valuable impact for our employees.

We are also trying to be more flexible in our 401(k) plan and our DC plan. We currently do not offer an after-tax plan and that’s something we’re evaluating in 2019. 

DC Institute: Who makes these decisions ultimately?

Carl: Unum’s HR and senior leadership team will have the final say. Like with most companies, when there are limited resources and competing priorities we have to make the case. We provide the senior leadership team with recommendations and make presentations on our potential spend and the cost-benefit. In order for us to pass the student debt relief program, we had to put in a lot of legwork internally to get the approval from the decision makers and all of the team had to be on board and ensure that it worked from everyone’s perspective.

DC Institute: How do you continue to keep your plan relevant?

Carl: We continue to monitor our peers in insurance and financial services, as well as other local employers. We look internally at our offerings and ask ourselves, does this continue to be an effective spend and what is new on the horizon? Looking back five years ago, student debt repayment was not a front running concern, whereas now it is.

DC Institute: What is the best advice you received regarding your role and your plan?

Carl: Make sure you are being compliant, that you are being a responsible fiduciary with what you do and with regard to your programs. That is a core value. Beyond that, be flexible, be agile and be able to adjust. It could be as simple as a new investment offering in the 401k plan or being creative with the options. It could mean plan design and assessing whether our competitors have been more creative on that. It means being able to adapt your benefit programs to the changing needs of your employees and to understand your employee group no matter how small or how large. Everyone has different needs, be it geographic, age, gender and or participation levels.

DC Institute: Carl, if you weren’t in this line of work, what would you like to be doing?

I love the outdoors, I would try to do something in the outdoors. I am hoping that in my retirement I am going to be doing something a little bit more creative and outside.

DC Institute: Thank you, Carl, for your time and for your words of wisdom to other plan sponsors. We look forward to your session in April.