An Assistant Director of Benefits for a not-for-profit company operating in Cape Cod, Massachusetts and has approximately 900 employees talks about the company struggle to conduct employee education programs for the company retirement plan.
The company reported that managers were finding it difficult to get employees to participate in the plan for several reasons. In fact, retirement plan participation rates were so low, they questioned whether it was feasible to continue the plan.
The reason cited for low participation rates was attributed to the fact that the company operated on a 24-hour schedule and managers found very little time to conduct employee education programs as a result. In addition, the company had consistently failed testing on the plan year after year due to the low participation rates.
In an unorthodox move, the company created a monetary bonus incentive for managers to increase employee participation rates and/or tying bonus to employee benefit plan/retirement plan participation rates.
After making the manager bonus plan partially contingent on employee retirement plan participation rates, the company saw a marked increase in plan participation. And equally as important, the company passed compliance testing for the first time in the history of the plan.
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