Competition Spurs Dramatic Increase in 401k Deferral Rates. At a TPSU program in Tennessee held at Vanderbilt University, the General Manager of HR at a crane company describes how a competition among young engineers led to dramatic increases in their 401k contributions.
Started by one engineer who posted his deferral rate on his cubicle, others followed leading to a competition that has led to an average contribution of 12-15%, among the engineers, even though they are some of the youngest employees. They also calculate who will have the most money when they retire as part of the contest.
The leader is deferring 20%.
Which leads to a simple but obvious observation. We need to make savings for retirement interesting and fun because, inherently, it is not especially for younger workers. For example, another plan sponsor attending a TPSU program raffles off prizes for big screen TVs and other items at education meetings and attendees get tickets based on their deferral rates.
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