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401k Participation Rates Increased Through Engagement and Common Sense

Many companies that sponsor a defined contribution (DC) plan like a 401k or 403b struggle to engage employees in their retirement plan. Though auto-enrollment and other auto features have proven to be successful in increasing 401k participation rates, they can also mute engagement, which is critical. A plan sponsor attending a TPSU program held at Vanderbilt University explains a simple yet brilliant way that he is able to engage his employee population.

The HR professional at a multi-national manufacturing company with over 150 employees in the US was able to raise 401k participation rates from low 60% to over 80% through engagement. Walking the floor, as he does every day, people ask about increased wages. Rather than dismiss them, the HR manager engages them and invites them to meet with him at which time he suggests creating a budget.

He uses the conversation as an opportunity to ask about retirement planning and suggests meeting with the plan’s advisor and participating in the company’s 401k. These conversations have led to not just better participation in the company’s retirement plan but also to a more engaged and productive workforce.

Taking simple steps to discuss what is a difficult subject for many is the key to improving outcomes in conjunction with auto-features that are part of the Ideal Plan. Engagement becomes critical as people get closer to retirement and have to make difficult choices including which advisor to use. Engaging in one on one meetings with the plan’s advisor who has been selected and monitored by the company is likely to equate into better advise for that retiring or departing employee compared to an advisor that might not have their best interest at heart as discussed by another plan sponsor at the same TPSU program held at Vanderbilt University.

Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein

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