Merely providing a retirement plan isn’t enough. Successful organizations understand the importance of helping their employees gain the most value possible from 401(k) plans.
By explaining benefits and offering key services, you can increase the value of your plan. Once you’ve designed a high-value retirement plan, the next step is to help your employees get the most out of participating.
4 Ways To Guide Your Employees To More Plan Value
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Automatically Enroll Employees. To increase participation rates and streamline the 401(k) plan process for your employees, automatically enroll them in your plan. Make your plan as easy as possible to participate in from the beginning. If employees don’t want to participate, they can always opt out of the plan.
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Automatically Increase Contributions. Take the ease of automatic enrollment one step further by automatically increasing your employees’ contributions to their plans by 1 percent annually. Communicate to your employees the benefit of accepting this service and explain that they may opt out of the automatic increase. Automatically increasing contributions is a great way to help employees reach their maximum contribution level.
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Provide A Plan With Reasonable Fees. Retirement benefits plans usually come with fees that fall into three categories: [link to: ] plan provider fees, third-party administrator fees and financial advisory fees. About 75 percent of companies view fees as the most important consideration when selecting a plan. A plan with high fees increases the cost of participation for your employees, but a plan with low fees may not provide the level of service that your employees desire. It’s important to select a retirement plan with a fee structure and level of service that’s best suited for your employees’ needs.
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Invest In Education. For your employees to get the most out of their retirement plan, they need to understand it. Good education goes beyond emailing information or handing out paperwork for your employees to read. Schedule meetings and webinars to explain specifics of your plan and answer questions. Continue educating your team beyond the enrollment period by conducting quarterly update meetings to address new issues or questions. When your employees thoroughly understand the plan, they’re more likely to realize the plan’s full benefits.
By following the four steps above, you’ll help your employees to secure a comfortable financial future.
Do you want to increase the value of your organization’s retirement plan? Schedule a free consultation with a Richard Brothers financial professional to learn more.
