Raffles Help 401k Plan Increase Participation
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 top of mind. An HR supervisor that administers her company’s 401k plan attending a TPSU program held at USC explains how the use of raffles helped boost participation to 97%.
The concept is very simple. 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.
And employees already in the plan are incented to increase deferral rates through the raffle as well.
Making 401k or 403b plans and the education meetings interesting and even fun can be a challenge but simple things like raffles or offering pizza can make a big difference.
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. Being logical, she figured that if people were serious about their retirement, they would come even without food. Needless to say, pizza is back on the menu.
Other lessons learned at TPSU by the HR supervisor: finding out about financial wellness and implementing immediate vesting. Like with other TPSU programs, learning what other HR and finance professionals running their organization’s 401k or 403b plan are doing is most important.
TPSU is scheduled to conduct 75 half-day programs in 2017 – check the schedule for a program near you.
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