2009 Benny Awards Benefits Leadership in Retirement Planning
Jonathan Hayes
Associate Director of Retirement Benefits
Verizon Wireless
Basking Ridge, N.J.
It's likely not surprising that Verizon Wireless knows the do's and don'ts of running a customer call center. What may raise some eyebrows, however, is that the company is willing to share its call-center expertise with its 401(k) plan vendor.
"Verizon Wireless has experience with running call centers. We view the call centers of our 401(k) plan provider, and all vendors we work with, as an extension of Verizon Wireless. As such, they should be accountable to the same level of standards that we are internally," says Jonathan Hayes, associate director of retirement benefits at Verizon Wireless.
Hayes' approach to call centers - breaking down barriers to make sure that employees are best served - characterizes his approach to his job in general, and is why EBN named him its 2009 Benny Award winner for Benefits Leadership in Retirement Planning, a benefits professional who holds steadfast to the notion that the workplace can engage employees in a profound dialogue on saving for retirement.
Spreading the knowledge
In July 2008, Verizon Wireless' 401(k) vendor allowed Hayes and his team to visit its call-center training facility for a joint training effort on the wireless data company's new 401(k) plan enhancements.
Normally, the plan provider would have had reservations toward such a visit, but Hayes' persistence won the day, explains Julie Hankinson, executive director of benefits at Verizon Wireless and Hayes' boss.
The visit to the training center resulted from tests calls made by Hayes and his team to the 401(k) vendor's call center. He sent the tests calls to the plan's management team, explaining that he needed more robust responses from the call-center representatives and would be happy to collaborate on some training sessions.
"The scope and scale of our new 401(k) plan enhancements were pretty complicated," Hayes says. The responses from the call-center representatives were not going to cut it. Hayes should know. Before arriving at Verizon Wireless in 2007, he worked for 15 years in the retirement-benefits space on the consulting and vendor side.
Knowing the complexities of the new designs - such as shifting from retail to institutional funds and adding a Roth 401(k) component - coupled with the skill sets of the phone-center reps, who are mainly trained on handling transactions and answering general plan questions, Hayes knew where reps might drop the ball.
The project was "a partnership with the vendor and a bonding experience between an employer and a plan services provider," Hayes says. The collaboration also provided some ownership to the call-center representatives, realizing that they don't just answer calls on this account, but are a part of the Verizon Wireless team.
Fine-tuning designs
But Hayes didn't just change the way Verizon Wireless' retirement plans were communicated; he changed their design as well. Also in 2008, Hayes led a shift in the company's 401(k) fund lineup from retail to institutional funds. The driving factor for the shift stemmed from skyrocketing expense ratios and the investment fees that retail funds traditionally carry with them and the lack of transparency among some retail carriers regarding those fees, Hayes explains.
"We did some analysis of the long-term impact of those fees on participants' accounts, and it was pretty amazing how over time the fees could chip away at the earnings of participants' accounts over 20 to 40 years of savings," he adds. "We were also looking to diversify fund offerings within the plan's portfolio. We felt that moving into the institutional environment allowed us to add additional asset classes to the plan, such as target-date funds.
Verizon Wireless, based in New Jersey, employs about 86,000 workers. Its retirement-benefits team includes a staff of five that manages the 401(k) plan, the pension plan, the cash balance plan and the company's cash-based long-term incentive known as the Value Creation Award. The company, however, maintains a separate compensation team and health and welfare benefits team. The average worker age is 34.
The new retirement outlook
Hayes also sees retirement benefits as a way to combat the skyrocketing costs around health care. "With all the talk around health care reform, you don't hear too much talk about driving individual savings to help fund for health care spending in the future," he says.
"It would be a disservice to our employees to allow them to retire without an appropriate nest egg. Not only for being financially comfortable in retirement, but also being able to afford health care costs."
The economic downturn and the volatility in the financial markets made it easier for Hayes and his team to grab the attention of employees. On the retirement benefits side, "we don't have the luxury of an annual enrollment in which employees review their choices to make sure they are appropriate," he says. The fact that 401(k) accounts are taking a hit has allowed his staff to turn participants' attention on and nervous energy over the economy into something positive.
As a result, Verizon Wireless partnered with AYCO, a provider of comprehensive financial counseling and education services, on some workplace seminars on 'Investing in a Volatile Market.'
"The seminars, which have been a huge success, have allowed us to help our employees to navigate through the difficult waters of a volatile market, while at the same time, reinforcing our 401(k) plan enhancements, such as institutional funds line and the Roth 401(k)," Hayes says. The educational discussions also explain to workers about diversifying their portfolios, not making rash decisions and educating them about long-term investment strategies.
Retirement-savings strategies
In 2006, the wireless provider implemented auto-enrollment for its employees. Prior to the auto-plan features, the company's 401(k) plan participation rate was about 62%. Now, Hayes says that number has reached 83%.
Despite rough patches in the economy, Hayes is committed to educating his employees on the importance of investing and saving for retirement.
"At Verizon Wireless, we see a direct correlation between participation in the benefits programs, particularly the 401(k) program, and retention and employee engagement," he says. "We are always trying to onboard a new employee as quickly as possible."
When new employees come through the door, you have their full attention. "If you miss that window of opportunity, it is much harder, we feel, to get their attention at a later date," Hayes explains. The company also targets employees who are not participating in the plan, helping them to realize the value of saving and investing for retirement.
"Jonathan sincerely has our employees' interests at heart as he designs and administers all of our various retirement benefits programs, making sure that the company is doing everything possible to provide the best retirement-savings tools for our employees that we can," says Hankinson, who nominated Hayes for the award.
Hankinson says he is constantly thinking of creative ways to ensure that workers are adequately saving for retirement. This means reaching out to employees to help them to understand why they need to increase their participation rates, she adds. "He's really amazing."
For example, Verizon Wireless recently acquired Alltel, another wireless provider. The company employed 16,000 workers, which meant Hayes and his team had to educate and enroll those employees into Verizon's retirement benefit plans and programs. "He has done a phenomenal job of seamlessly moving those workers into our plans and along the way showing some attorneys a thing or two," Hankinson notes.
Hayes believes the experience was invaluable, given that many benefits professionals may not get the chance to work on an acquisition and merger of benefits plans. Equally important, the assignment tapped into his passion of transforming employees and their families' lives by bring them into Verizon Wireless' retirement benefit programs.
Bitten by the benefits bug
His passion for benefits was sparked unexpectedly. Shortly after graduating from Penn State in 1993, Hayes accepted an entry-level position with Bankers Trust Company in New York City. While his long-term goal was to move to one of their international offices, his initial assignment found him in the defined-contribution plan and participants' services division.
"It was a great opportunity because I learned everything from unit value calculations, trust funding, tax reporting, client relationship management, to running recordkeeping systems," Hayes notes. "Those skill sets proved invaluable as I moved through my career because they provided a very well-rounded retirement benefits background."
While at Banker Trust, "it dawned on me that I really enjoyed performing work that helped transform lives - I was hooked! I haven't looked back since," he adds.
His hobbies outside of work include: keeping saltwater/marine reef aquariums, landscaping and gardening, hiking and camping, watching Penn State football games and shooting digital photography. The New Jersey resident and native also recently ventured into pet therapy by training his dog to interact with residents at nursing homes and patients at children's' hospitals.
He also enjoys horseback riding. Hayes says he enjoys spending time with his sister's four children, ranging in age from 18 months to nine years, as well as other family members, close friends and pets.
