Plan Sponsors are seeing their company’s participation rate increase by adding ESG TDF to their lineup.

Case Study: Shelton Group

Using funds as QDIA improved 401(k) plan contribution rates

Shelton Group is the nation’s leading marketing and communications firm focused exclusively on sustainability since 2005. Its corporate mission is to provide a market advantage for companies and organizations that are creating a sustainable future.

As a mission-driven firm, Founder and CEO Suzanne Shelton believes that it’s critical to practice what they preach – to be a leader, not a follower. At the office, recycling, reducing the carbon footprint and focusing on sustainability are standard operating procedure. But these values weren’t reflected in the company’s retirement plan.

Shelton Group was looking for sustainable 401(k) plan investments that aligned with the company’s mission – and challenged their retirement advisor to find a solution.

In 2017, their advisor recommended the Natixis Sustainable Future Funds®, an ESG-focused target date family. Shelton Group added the funds as a Qualified Default Investment Alternative (QDIA) option in July 2017.

Prior to the adoption of the funds by Shelton Group, the average employee 401(k) contribution rate was 4.7%. As of December 2020, that average deferral was 7.8% – a 66% increase.

It’s not just about hugging trees and saving the planet. We are capitalists as well as environmentalists at Shelton Group. We believe if we can help corporate America see the business value in sustainability, then they’ll keep doing it. Being able to offer the Natixis Sustainable Future Funds to our employees sends a message that this isn’t just a new business development thing we do to get a few clients in the door. This is how we live, these are our values, this is what we believe in.”

Suzanne Shelton • Founder and CEO

Key Takeaways —

• Shelton Group wanted its 401(k) plan investments to align with its corporate mission.
• They worked with their retirement advisor to find a solution: the Natixis Sustainable Future Funds.
• Introduction of the Natixis Sustainable Future Funds personalized the idea of retirement investing.
• Using the funds as a QDIA has improved contribution rates and helps with employee retention.

Case Study: BW Research

401(k) participation and contributions jumped when sustainable funds added

BW Research is a full-service applied research firm focused on supporting its clients with economic and workforce research, strategic planning, and evaluation services. In 2019, the firm partnered with Natixis Investment Managers to create the Future of Work report examining the challenges of attracting and retaining talent in an era of economic and technological transformation.

According to BW Research, workers across a spectrum of industries and occupations have indicated that how employees are treated is critical to how they view their satisfaction on the job. Increasingly, employees want to see that executive leadership and governance structures exist, and that equity is a top priority at their employer.

Through its ongoing focus on societal and workforce trends, BW Research is committed to social, economic and environmental equity. For its 401(k) plan, the firm was looking for funds that were easy to understand and provided strong returns, but that would also allow employees to invest in companies making positive social and environmental progress.

In July 2018, BW Research selected the Natixis Sustainable Future Funds®, an ESG-focused target date family, for its 401(k) plan.

Adding the Natixis Sustainable Future Funds had an immediate positive effect. In the two quarters following the introduction of the funds: The plan participation rate increased by 75%. Plan contributions increased by 228%.

We selected the Natixis Sustainable Future Funds® so our employees could have a simple and easy-to-understand 401(k) option that seeks to provide strong investment returns. It’s a source of pride for our organization and we reference the funds as a proof point when we discuss our firm’s commitment to social, economic, and environmental equity.”

Phil Jordan • Vice President, BW Research

Key Takeaways —

• BW Research specializes in understanding racial, ethnic, and gender diversity and its importance in attracting and retaining highly qualified employees.
• Research suggests that all companies can benefit by evaluating their practices and policies to ensure they are focused on the attributes that matter most to the employees they care about recruiting and retaining.
• Adding sustainable investment options to a retirement plan can also improve participation more broadly.
• Small changes can have an immediate positive impact.