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ARCHIVED  November 19, 1999

Workers seek benefits with flexibility, mobility

Regional workers are paying closer attention to the eventuality of retirement and the needs of old age and seeking more flexibility and control over their retirement-related employee benefits, reported many of Northern Colorado’s largest private-sector employers.

To meet the evolving needs of their employees, many of the region’s largest companies, including Kodak Colorado Division, Western Plains Health Network, Woodward Governor Co. and State Farm Insurance Co., have changed or will soon change their retirement packages.

“I think they’re more interested in retirement now. Most people are cynical about Social Security, so they want some very strong retirement programs,´ said Melinda Boddicker, benefits manager for Woodward Governor, which recently shifted its employee retirement package toward a more traditional 401(k) pre-tax investment plan to better serve the needs of its 825 employees.

“It is a totally mixed bag,” she added, describing the diverse career stages of prospective Woodward employees. “But the retirement program is a very important program to all the people we see coming in the door.

“In the whole scheme of things, the retirement package is one of the three most expensive benefits a company offers,” Boddicker emphasized. Now, more than ever, a company’s retirement package needs to be a selling point.

Employees and job seekers of all ages, it seems, are looking ahead.

But Danny Devine, director of media relations for the Employee Benefit Research Institute, suggested that recent trends in evolving retirement plans may be rooted in more than one place: “When you actually talk to younger employees, is it the fact that they have a retirement plan or that they have a specific type of plan to direct their own investment portfolio [that attracts them]? Portability and flexibility are key for the younger ones,” he said.

“A lot of the question then becomes: Are they doing it for retirement or for other investment purposes?” Devine added, suggesting that the newest generation in retirement packages may be geared as much toward flexibility as preparation.

State Farm Insurance in Greeley has more than 1,300 employees in the region. The company now offers all of its employees a two-day seminar on financial awareness — a class that before was offered only to employees who reached the age of 50 while with the company.

“It was such a great class, many folks said they wished they’d seen it 25 years ago, so this year we initiated a new class on financial awareness to all staff,´ said State Farm spokesperson May Martinez Hendershot.

State Farm offers the seminar through Ernst & Young LLP financial consultants, and believes, Hendershot said, in placing the information and tools in the hands of its employees rather than providing the same generic program to everyone.

“The fact that the young people today are more aware and interested in planning for retirement has helped companies refocus in that area,” she said. “The technology and information available now is of more interest to young people, and they have a better handle on what they need.”

Paulette Friday, director of compensation and pension with Banner Health Systems, parent company of Greeley-based Western Plains Health Network, agreed that employees are looking for more than just a pension and a post-career nest egg. “I think they would say it’s a mixture of wanting to be sure I have money for retirement but in doing so let me be as flexible as I can,” she said.

On Jan. 1, 2000, Banner Health Systems will launch a new retirement plan through which the company will match an employee’s 401(k) contribution dollar for dollar up to a maximum of 4 percent of their annual salary. Employees will be able to access the pre-tax account for personal loans and invest funds within the account as they wish. The retirement benefits program will be immediately available to all employees, which is perhaps the biggest change. Previously, Banner Health employees had to wait five years before becoming eligible to enroll in the retirement program.

“It’s an attraction and retention tool, we wanted to be just as competitive as others,” Friday explained. “Portability is one of the things the generation-Xers are after,” Friday added, citing a growing demand for transferable benefits. “We eliminated the five-year vesting period because the younger workers want to get the immediate benefit without having to commit for five years. It may give us a leg up.”

Gene Haffner, director of community relations for the North Colorado Medical Center (Northern Colorado’s largest member of the Western Plains Health Network), elaborated: “In a sense it’s really the company providing the framework of a program and using its volume and size to negotiate really good services from a financial-investments institution while allowing employees the flexibility and means to manage their investment as they see fit.”

Starting Dec. 1, 1999, Kodak Colorado Division, which employs approximately 1,800 people in the region, will offer its employees a new cash-match retirement plan that will allow its employees “to put in money that the company will match up to a certain percent,´ said Director of Communications and Public Affairs Lucille Mantelli. “We found that our old plan was based on length of service, which wasn’t real attractive to people entering the work force. This makes the retirement plan more mobile.”

The increased demand for portability and flexibility in retirement packages reflects a much-recognized phenomenon: Fewer people are sticking with one employer for their entire career.

“We have found that employees don’t stay with companies as long as they used to,” Mantelli said. “It’s very common for someone to have a career with four or five different companies.”

And not only are people more mobile during their working years, the Employee Benefit Research Institute Education and Research Fund’s 1999 Retirement Confidence Survey found that 16 percent of employees returning to work after retirement were “trying a different career.” Workers are seeking flexibility at every stage of their career — flexibility to change jobs more than once as well as flexibility to try something new after retirement.

The report also stated that many workers are unaware of the fact that the normal retirement age for full Social Security benefits is rising gradually from 65 to 67.

“Today’s workers expect to work longer than current retirees actually worked. Nearly half of today’s workers expect to retire at age 65 (30 percent) or later (17 percent) and 5 percent expect they will never retire,” the study reported.

The average employee’s desire to work longer may counter any government decision to push back the retirement age and, as Boddicker suggested, confidence in Social Security benefits may be waning anyway.

Devine concluded: “Generally the average retiree is looking at 20 years in retirement. That’s a long time. People want to stay in the working population longer now. If I were an employer that’s certainly a population I’d be extraordinarily interested in.”

Regional workers are paying closer attention to the eventuality of retirement and the needs of old age and seeking more flexibility and control over their retirement-related employee benefits, reported many of Northern Colorado’s largest private-sector employers.

To meet the evolving needs of their employees, many of the region’s largest companies, including Kodak Colorado Division, Western Plains Health Network, Woodward Governor Co. and State Farm Insurance Co., have changed or will soon change their retirement packages.

“I think they’re more interested in retirement now. Most people are cynical about Social Security, so they want some very strong retirement programs,´ said Melinda Boddicker, benefits…

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