Underutilized Retirement Plans
Matching 401(k) plans are one of the most powerful tools HR professionals can offer their employees to improve recruitment, strengthen retention, and boost morale. But many employees do not take full advantage of an organization’s matching 401(k). Whatever the reasons – they’re too young to think about retirement, they don’t understand the plan details, or maybe they’ve just forgotten about the benefit – they are missing out on the potential savings.
How can an organization best encourage its employees to take full advantage of their retirement plan? Classroom training has proven to be ineffective, and apps distributed for individual use tend to be too complex or too easy to forget about using.
One solution that has proven its effectiveness over years of use has been one-on-one meetings with each employee. Counselors present flexible, individualized sessions tailored to each person’s specific work and family circumstances. Interactive calculators include important tax, age, income, and interest items in addition to personal goals. The results have been astonishing! Half-hour, one-on-one meetings with over 61,000 employees have resulted in overall plan contribution increases of over 66%. Participant reactions such as “Wow, I had no idea that contributing only 1% or 2% could make such a difference” are common. After each interactive session, the employee receives a personal Retirement Projection Statement that is printed on the spot. This document can be shared with family members to illustrate the retirement benefits of increased participation in the organization’s matching 401(k) program.
During the employer-approved 30-minute program, counselors also offer a voluntary benefit, such as life insurance or a long-term care policy. These voluntary benefits protect employees while saving for retirement and also protects their retirement income after they begin receiving it. The bottom line is the employees improve their retirement prospects, and the employer pays nothing for the service. It is truly a win-win solution!
You can make a difference in employee personal engagement – Contact PCI for a range of solutions