Following the premise that the easier something is to do, the more likely someone is to do it, The Principal announced in January a new way for workers to enroll in their employer-sponsored retirement plan: texting.
“One of the easiest ways to save for retirement is through an employer-sponsored retirement plan, yet the biggest hurdle is simply getting individuals to sign up,” Jerry Patterson, senior vice president of retirement income strategy at The Principal, said in a statement. “We know people have good intentions, but while many eligible employees say they are going to take action, many of those same employees don’t. By making the process quick and convenient, we’re able to battle inertia and get individuals to start saving right away.”
Workers can sign up for their retirement plan and set their contribution amount with a text message or by visiting a mobile-friendly website. Investment options can be set either online or by phone.
Also playing on participant behavior, this time individuals’ wish to keep up with the Joneses, Putnam is launching a new feature on its 401(k) platform that compares participants to those of their peers based on age, gender and income.
Putnam announced in late January that it was launching the How Do I Compare feature based on the theory that peer pressure might compel participants to up their game if they see their peers are saving more than they are.
Participants can compare their savings rate and projected income replacement to similar participants as well as the top savers in each peer group.
The new feature should be available in all 401(k) plans administered by Putnam over the next few months.
Edmund Murphy III, head of defined contribution for Putnam Investments, said in a statement that the comparison feature is designed to work with other features Putnam has already rolled out: the Lifetime Income Analysis tool, which shows participants their projected monthly income and helps plan for shortfalls; the Health Cost Estimator, which shows what percentage of their future monthly income will be spent on health care costs and provides an itemized description of how much will go to medical, dental and drug costs; and most recently a financial wellness program that gives participants education tips, financial management tools and access to budgeting experts.
To get workers more engaged in their retirement planning, Vanguard partnered with HelloWallet to complement the educational resources the firm currently offers participants.
HelloWallet is an online financial wellness service that uses behavioral economics and psychology to help users make better decisions regarding debt, spending and saving. Users can access the service on the Web and through a mobile app. Vanguard announced the partnership on Wednesday.
HelloWallet will not promote products, and Vanguard will continue to provide investment advice through online advice, managed accounts and financial planning services.
“We’re thrilled to be partnering with Vanguard to help employees make the most out of their compensation and benefits,” Matt Fellowes, HelloWallet founder and CEO, said in a statement. “This partnership will allow us to provide more Americans with the guidance necessary to increase their monthly savings, pay off debt faster, and improve their use of health and retirement benefits. Employers win, too, as they need innovative solutions to help their work force manage the increasingly complex and self-directed benefits offered in the workplace.”
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