Companies that offer retirement plans know how hard it is to incentivize people to take complete advantage of this benefit. The hesitancy could be due to a lack of financial education regarding the power of compound saving or the lack of sophistication regarding the intricate world of investments (stocks, bonds, etc.). Regardless of the reasons, every plan sponsor wants to maximize plan participation.
The Path to Increase Retirement Plan Participation
Whether you want to level the playing field or want everyone in the company to have a sound retirement nest egg, the big challenge is how to go about providing information, gaining trust, and getting more individuals to sign up. Consider the following suggestions as you discover your own path to increase retirement plan participation:
Understand your population, as one size does not fit all.
Do you have a larger presence of one particular age group? Do you have high turnover? Such factors can influence your approach.
Find out why they are not participating in the plan (don’t assume).
Assess your current plan.
Is it conducive to the people you employ? Are there certain groups who are not getting all the benefits they could? Have your company demographics changed since you last spoke with a plan advisor regarding plan design?
Consult with experts about adding more features.
This might include auto-enrollment and auto-escalation (e.g. raise contribution levels in small increments of 1%, which add up over time), offering investments that cater to particular groups of employees who care about certain sectors (technology, the environment, etc.), and/or helping recent graduates via a matching program that expressly pays off student loan debt.
De-mystify financial jargon.
Ensure literature handouts and email blasts are relatable and understandable by the average person.
Spend money on enrollment events.
Consider door prizes, giveaways, food, and engaging speakers, so people show up and don’t zone out.
Leverage onboarding (small sessions or one on one).
This is a great time to educate new grads/new hires about the retirement plan, assuring them that even investing a small amount will add up over time.
Shorten the window to enroll.
Rather than having a long eligibility period, allow employees to enroll after just 30 days, or even immediately upon hire. In addition to getting more participants, this will likely lighten the administrative burden for your human resources team.
When considering a switch in your plan provider, don’t forget to inquire about the employee experience.
Some sites are more intuitive than others, and some look better when accessed by a smartphone (less-seasoned employees, in particular, might prefer self-service via easy-to-navigate online tools).
In need of a team dedicated to employee benefit plan audits? Contact us today!
How to Increase Retirement Plan Participation
If you value having financially healthy, happy, and independent employees, the choice is clearly to increase participation in your retirement plan. Companies need to be creative with customized features that speak to their population and, thus, enhance enrollment. Figuring out the right way to educate people and the right people to deliver the facts are key to generating more participation. You can start by evaluating the retirement plan needs of your company, and then bring in experts like a licensed benefits advisor or broker to help fine-tune your offerings. Weinstein Spira has long lasting relationships with many of these valuable experts, and we can put you in touch with them. We can also share about our experience with clients and what has worked well. Don’t hesitate to give us a call.