Ed Dressel  0:10  
Welcome, everybody. This is Ed Dressel with Pensionportal.com It's a pleasure to have Jim Westrum here. Jim was with Orono School District and has been a longtime user of TRAK Desktop version helping employees understand their retirement. We'll talk a little bit about that, but also Orono was the first school district to get Pensionportal.com for their employees, and it was a fun process. I'm excited to have you here, Jim. Thank you for joining me today.

Jim Westrum  0:36 
Yeah, it's great to be here. And I'm super excited to share about the positive impact that Pensionportal had in the Orono School District, not only for our employees and attracting and retaining those employees, but we actually were able to use Pensionportal during our negotiations process, and we had buy-in from our school board, buy-in from our administrators, and buy in from our local labor leaders.

Ed Dressel  1:03 
Yeah, you went through multiple layers to get that approved, and that's an interesting process. Let's go back to the very beginning. We met down in Arizona, and you picked up TRAK to start helping your employees understand retirement and the value of their pension, and if they could retire. Tell me a little bit about what you did when we first started.

Jim Westrum  1:23 
Yeah, well, it was so nice to see your product that you use for financial advisors. So, for years, and actually maybe even decades, I've been working with our employees to help them understand the value of working for a school district, and how incredibly valuable that is going to be, not only when they're currently working, but when they retire as well. The pension actually provides a significant replacement of their current income when they retire, and then, of course, when it's coordinated with social security it adds another income during the retirement years. However, many of our employees weren't aware of the coordination of those two items, because in our state, our state public pensions simply stay in their lane and they show the value of the public pension, and it would require our employees to actually be able to combine social security, their public pension, in addition to any savings they may have in a 403(b) or a preferred tax savings vehicle. One of the neat things that I saw when I first met you, Ed, is that you had a system that could show an integrated benefit analysis, and that proved to be very useful in explaining the value of working for school districts and staying in our school districts. It helped us not only attract but to retain our employees.

Ed Dressel  2:48 
Talk to me a little bit about how you helped retain employees using TRAK.

Jim Westrum  2:53 
Yeah, you know, it's kind of interesting. Many school district employees come in, and of course, they want to teach, they want to do the other jobs that are available to us. Custodial work is highly attractive in a public sector, food service as well, bus drivers. So we took a full system view, and we looked at all of our employees, and it's not uncommon to have an employee not fully understand that their compensation not only occurs when they're actively working, but due to the public pensions that are required for participation in Minnesota, these employees will also receive a lifetime benefit through their public pension combined with social security. So one of the neat things that we were able to do is we were able to communicate that to our employees during our annual benefit fairs, and also we worked with labor leaders in Minnesota. We are collectively bargain, and so we went with labor leaders to demonstrate the fact that our employees are going to be really well off, not only while they're working, but when they retire from our school district. And it's not uncommon for an employee to see an advertisement from the private sector. I'm going to use food service for an example, perhaps McDonald's or another fast food restaurant says, you know, we can pay this amount per hour. And we would actually sit down with our employees and demonstrate to them that even though they may not earn an hourly wage similar to what is being proposed in the private sector, if they work for us until their full retirement age, they're going to be much better off. And it was really exciting sitting around the lunch table with employees and having them interact with each other, having teachers and custodians and food service workers sitting in the cafeteria and talking to each other and finding out just how valuable their pensions are.

Ed Dressel  4:49 
So tell me, how you were using it to help engage your employees and maybe do recruit recruitment as you're moving forward.

Jim Westrum  4:57 
I will share with you that full retirement age, obviously, is between 65 and 67 depending on the year you were born. And we often would look for people mid career or even later career, and try to recruit them, because at that point they had been fully trained, they were highly skilled, and we could get them to come into our school districts and serve our communities. And everything we do is aligned with our mission, our vision, and our values, which is to provide high value to our community, but our ultimate goal is to serve the students of our community and the members of our community. So we're looking for the most competent, highly trained, and dedicated employees. However, sometimes our salaries may not look as attractive as the private sector, but when you combine that with the public pension, we were able to demonstrate, recruit, and actually onboard a number of employees who had previously been in the private sector. And we demonstrated that it was really advantageous, not only to them, but to our entire community for them to come and work for our local school district.

Ed Dressel  6:04 
So, let's fast forward a little bit to Pensionportal. Your school district was the first one to pick it up. You guys were innovative. Tell me a little bit about the process that you went through to get buy-in from the various parties.

Jim Westrum  6:16 
Yeah, I'm happy to share the fact that in our school district, as I mentioned before, we have collective bargained agreements, employment agreements with salary and benefits, and we were wanting to make sure that our employees could maximize the benefit of their total compensation, not only while they're working for us, but when they retire in their current employment agreements. And so we actually met with local labor leaders, and we indicated to them that there is a value in the public pension that may not be readily apparent to their employees. And so we know that our labor leaders in each of our collectively bargain units need to communicate the same information to their members to get a ratification or to get approval of a contract. So in recent years, although it seems like I've been saying that for my entire career, the resources and the revenue to a school district is typically limited. We can't give bonuses and we don't give large percentage increases, but what we do hope is that we can structure their compensation in such a manner and provide benefits, such as their 403(b)'s and tax sheltered savings accounts, combined with their social security and combined with their public pension to maximize their lifetime earnings and increase the attractiveness of not only coming to work for us as a public school district, but to stay with us for their entire career and to stay with us as long as they are excited and engaged in the work that we do.

Ed Dressel  7:52 
So, when Pensionportal was brought to the school district, who were the people you had to talk with and show it off? What was the first group of people that you interacted with?

Jim Westrum  8:02  
Sure. So one of the things when we are looking at our compensation strategies is typically we have a subcommittee, the school board, the governing body, and we talk about what do we want our compensation to look like. Do we want it to concentrate on compensation, which would be salaries, do we want it to concentrate on benefits and health insurance? Obviously, (that) is a big attraction to employees. However, one thing that's not readily known by our employees is the value of their pension. So, when we come up with a compensation strategy, we actually meet with a subcommittee of the board, and we go into great detail as to what the compensation will look like and what the benefit structure will look like. But it's not uncommon for a school board to want to engage their community. So, in the school district that I worked in, we actually engaged 12 financial leaders from the community, and we created a citizens finance advisory council, and we spent numerous meetings over several months looking at how best to design our compensation, and even more important, how best to communicate it to our employees. One of our ultimate goals is not only to attract and retain employees, but we want them to be engaged. We don't want them to be distracted by their salaries. We want them to have a high level of confidence that they made the right decision to come and work for our school district, because we're intentional in how we structure our salary and benefits, and we're also communicating the value of their pensio. And Pensionportal was able to allow us to demonstrate that not only to the local labor leaders but also to help them communicate it to their membership at the same time, while our administration and our human resources department had the same message. Yes, this is a really valuable benefit.

Ed Dressel  8:48 
Tell me a little bit about how the finance committee conversation went. I don't know if you were in those meetings, and what was the interaction when people saw the value of the pension as you delved into it?

Jim Westrum  8:51 
I'm glad you asked that question. So it's not uncommon for the HR director and the chief negotiator, as well as the finance officer, to advise the school board and to work with the school board as they are coming up with strategies for negotiations and designing compensation strategies. One of the unique and actually value-added items was Pensionportal. We could actually demonstrate the value over a career of working for our school district. And once we were able to run a number of scenarios, we could maximize that, so that it was in alignment not only with the school board's goals but also highly attractive to the employees. And our entire community has a high level of confidence in our school board because our school board does engage financial experts in our community. These experts typically are bankers and financial advisors and insurance agents and other people with a high level of skill in the private sector, and they're able to share their respective lenses with the school board and give the school board a high level of confidence in how to proceed. Once again, Pensionportal was a tool where we could be interactive, highly interactive, as we're doing these simulations, and then we could subsequently present those to our labor leaders and ultimately to our employees.

Ed Dressel  11:44 
Tell me a little bit of how it went with the labor leaders. What was the engagement interaction there?

Jim Westrum  11:48 
As we interacted with our labor leaders, it was apparent that their members knew that there was a value in their pensions, but I'm not sure that they knew that there was a high value in their pensions. And after working closely with our labor leaders, we could demonstrate how to maximize and leverage their pensions. For instance, in recent years, you probably have heard that the IRS has come in with Secure 2.0 and these are some strategies which provide additional strategies in leveraging 403(b) contributions. And we can go with Roth, 403(b)'s, we can go with traditional tax preferred 403(b)'s. A number of these items were discussed, and the school board, as well as the community, felt that these were highly attractive to attract and retain employees in all levels of their career.

Ed Dressel  12:48 
So, tell me, how did it go when you engaged the employees as a whole about the value of their pension and use that in your labor negotiations or your discussion about the value of their total compensation package?

Jim Westrum  13:01 
Yeah, so we were really excited to share the results of Pensionportal with our labor leaders, and so we did run scenarios on a number of the individuals who were actually involved in designing the compensation. And these were teachers, and they were other labor leaders, custodians, and food service. During that process, we wanted to demonstrate and show them how interactive Pensionportal was, and they were quite pleased. And so our school board actually decided, you know, what it's worth actually subscribing to Pensionportal and letting our employees do this. So we originally started with one employee group, and then moved after our teachers settled their contract to having all the teachers be involved, and then a neat thing kind of happened. We were in negotiations with some of our other bargaining units, and through the lunchroom, and through conversations in the hallway, and at the water cooler, the demand actually to have access to Pensionportal was expressed. Our school board gave that careful consideration, and determined, you know, what we should roll this out to all our employees in the district. If it's good for one collectively bargaining group, which was our teachers, it's probably going to be good as we seek to attract and retain custodians, attract and retain secretarial and paraprofessionals, and bus drivers, etc. It was received highly favorably, and it was kind of nice to see that, because we knew that it was really valuable to communicate this information to our employees.

Ed Dressel  14:41 
The pension is often a hidden value in the compensation package. It's like we're not going to tell you what it's worth, we're just going to tell you it's valuable. And putting boots to the ground and helping people appreciate the value made a difference in Orono, and not only with the teachers, but across the board in negotiations. Did you see a change in morale as people start to get and understand the value of their TRA?

Jim Westrum  15:05 
Actually, because of my role, I only have interactions with a handful of people. But I can give you an anecdote of an individual I was working directly with. I met an employee who was nearing retirement and expressed that she can't wait to retire because she had grandkids who were out of state and anytime she would be able to go visit her grandkids she just lit up and was so excited. Well, after she ran the Pensionportal and connected with her financial advisor, she determined that she had adequate resources to consider retirement, and she used Pensionportal with financial advisors, and subsequently decided it was time to retire and enjoy those benefits, and go visit her grandchildren in another state. We also had another couple, actually a couple, two teachers who were married, and they were thinking about retiring in the next year, because they wanted to do some travel. They were both in highly competitive positions, and we really wanted to try to retain these employees for a couple more years. So when they ran the Pensionportal, it became obvious to them that if they worked one or two more years, they would maximize their retirement pension, and that would be ideal for them. So they continued to work for us for a couple years. So, I guess to cut to the chase, the morale that I saw is we saw a couple employees who decided to stay with us a few more years, and they saw that the benefit of their pension made that totally worth their time, and we were thrilled that we were able to have more time to find suitable replacements for those very difficult to fill positions in the district. At the same time, we had a long-term employee who really wanted to give consideration to spending more time with her family, and she was ultimately able to make that choice to retire with a high level of confidence that she wasn't making a mistake, so in both cases Pensionportal actually kind of served to be a hero to these employees as they considered their future.

Ed Dressel  17:16  
And helping the school district with one, the normal attrition that you want, typically the higher income people off the books, and let them lead with confidence, which you never leave with a 401k plan, because you don't know what the market's going to do tomorrow. And then also helping people go, you know, this is earlier than you're supposed to retire, and there's a cost to it, and lets you see the cost before you make the transition, rather than, well, I know there's a cost, but I'm going to do it. You actually get to see and comprehend the cost.

Jim Westrum  17:42  
Absolutely, one of the biggest benefits of Pensionportal is everybody is different, and so their scenarios really aren't cookie cutter. You almost need to go in and run a scenario based on your specific situation and your specific goals, and see if that is in alignment with what you want in your future.

Ed Dressel  18:02 
Jim, I really appreciate you taking the time to talk today. It's been a great conversation about how you've leveraged it in your school district and how you help people smile about the ability to retire and keep working, and know that they have a valuable asset and income for the rest of their life that other sectors of this in our society don't get so that's awesome, leveraging it and helping people understand their total income package. I appreciate your time. Thank you for being with me today.

Jim Westrum  18:29  
It was my absolute pleasure. And you have a great day!