The beauty and danger of the Ideal Plan which includes auto features like auto-enrollment and auto-escalation is that it does not require or inspire participant engagement. The retirement plan administrator for a 600-employee eligible company attending a TPSU program held at LaSalle University explains how she made an impact on 401k plan participation and contribution through a raffle.
All employees who joined the plan or increased their contributions became eligible to win a $50 Amazon gift card . After their first attempt communicated just through email, 26 employees responded and made positive changes in their 401k plans.
Getting the attention of employees, especially younger ones, about the company’s 401k or 403b plan can be a challenge – people want immediate gratification. Saving for a stranger (their future selves) for an event that might occur in 30 years is not their greatest immediate concern. Plan administrators like the one attending TPSU at LaSalle University are beginning to realize that they have to make the process fun and not assume that employees will engage because it is good for them.
At a TPSU program held at Stonehill College in the Boston area, the HR manager new to the company noticed that attendance at 401k enrollment meetings was very good so she decided to stop serving pizza. After poor attendance, pizza is back on the menu.
An HR supervisor that administers her company’s 401k plan attending a TPSU program held at USC boosted participation to 97% using a unique technique. Employees not participating in the 401k plan are given one ticket for every percentage that they defer for a chance to win a tablet, TV or Echo. The raffle is part of the education meetings conducted by the plan’s advisor and winners are announced immediately after the meeting. At the last raffle, six of the 14 of employees joined increasing participation to 97% from 93%. Amazing success.
The administrator attending TPSU at LaSalle plans to institute auto features after hearing from peers at the program combining the best of all worlds – engagement and the Ideal Plan – which is a recipe for success.
