Employee education doesn’t work in defined contribution (DC) plans like 401(k) and 403(b)s, right? A Midwest manufacturing company with 750 employees has found a recipe that has more than doubled participation and has actively engaged employees. What’s the secret?
Before trying a new formula, the company had dismal participation in and engagement with their DC plan. So they switched things up. They required that all employees attend a short, high level orientation meeting conducted by their plan advisor followed immediately by voluntary one on one meetings with that same advisors. The results were outstanding.
Participation grew from about 30% to over 70% but perhaps more importantly, employees got engaged in the plan. The signup sheet for one on ones after the orientation meeting is almost always filled and workers have formed relationships with the plan’s advisor developing real rapport. Employees look forward to visits by the advisor with whom they have developed real relationships comfortable disclosing fears, problems and concerns that the advisor is able to use to develop the right plan. There’s an automated and immediate process that the workers can use to take action during the meeting. Brilliant!
Education customized to the plan and their unique position as well as advise through one on one meetings leveraging technology is a recipe for success. Generic, boring education focusing on investments is less than helpful – it can be debilitating making employees feel stupid.
The HR Director at the plan sponsor attending TPSU’s (The Plan Sponsor University) program hosted by Notre Dame had been to another program at Valparaiso University and came back to be “reminded and refreshed” but mostly to network with peers to learn about best practice. He’s constantly looking to learn more to improve his company’s DC plan and found TPSU to be a good format to get better.