In today’s economy, encouraging participants to stay enrolled in their plans and to set aside a portion of their pay is not an easy task. Communication and education strategies that may have worked in the past are no longer enough, and plan sponsors have turned to more creative ways to engage employees to enroll, contribute and stay invested.
In fact, due to economic uncertainty and common misconceptions about employer-sponsored savings plans, participants are making costly mistakes while saving, including discontinuing contributions, borrowing from their account balances, or taking lump sum distributions (minus taxes and penalties) when they leave a job. A recent study of baby boomers indicates that a third stopped contributing to their 401(k) or IRA accounts in light of the recent recession. Many of these boomers are now putting off their retirement plans.
“Tried and True” Pathways to Participant Motivation
Plan sponsors have traditionally turned to a number of tactics to spark motivation among employees. Many of these proven strategies have stood the test of time and should continue to be used by sponsors to reach participants and educate them on the value of their employer-sponsored plans. Some of these include:
- Benefit Fairs—A comprehensive employee benefits package featuring a retirement plan and other attractive benefits can serve as a strong retention tool for employers. Hosting a benefit fair is a great way to educate employees on the full range of benefits your company has to offer – many of which may be unknown to or underutilized by employees.
- One-on-One Meetings—Taking the time to meet with employees in a private setting is a great way to personalize education on employer-sponsored plans and answer questions people are often reluctant to ask in group settings.
- Annual Enrollment – The period of time when employees can make changes to their elected benefits is an ideal time to communicate the value of participating in a 401(k) or other employer-sponsored retirement plan.
Five New Ways to Boost Participation
Plan providers are also sharing newer strategies to help plan sponsors increase participation and motivate employees to take action. Many of these non-traditional communication and education channels are aimed at engaging participants in ways they prefer to be reached. Here are five new ways to motivate action among employees saving for retirement.
1) Engage through Multi-media – Hosting a video presentation or interactive webinar to help employees understand their 401(k) statements can help answer questions and decipher complicated provider materials in an interactive way. These forums allow participants to submit questions and receive answers in real time.