When you’re managing an employee 401(k) plan, your goals are to increase employee retention and engagement with a high-performing benefit while paying the lowest fees possible.
Offering a great plan and paying low plan management fees at the same time isn’t easy to pull off. Opting for a provider offering low fees but poor service doesn’t help you with employee retention or engagement.
There is one proven way to gain the most value from your plan while gradually lowering your fees over time: high participation rates.
When a higher percentage of your employees participates in your plan, the total value of your plan increases more quickly. With many providers, this leads to lower fees and costs.
To gain more value and lower your employee 401(k) plan fees, learn three ways to increase your participation rates.
1. Schedule Formal Enrollment Meetings For Your Employees
To encourage participation, you need formal 401(k) plan enrollment meetings where you and your plan advisors educate employees on the plan’s benefits.
Too often, employees opt not to participate in employee retirement plans because they do not understand the tax benefits and matching contributions employers are offering. This threatens their future prosperity and lowers your participation rates.
With a formal enrollment meeting, you can make sure your employees fully understand the value of participation, which should help to boost participation rates.
2. Offer One-On-One Participant Meetings
Once your employees have enrolled in the plan, you need to encourage them to stay enrolled and contribute the maximum amount to increase your plan’s value and lower your costs.
When you offer one-on-one meetings between employees and your plan’s advisors, you provide your employees the opportunity to benefit from individualized plan consultations that help them match their 401(k) plan investment strategy to their unique financial goals.
This enables them to derive more value, which in turn encourages them to continue participating and contribute up to the maximum.
3. Focus On Ongoing Informational Pieces
Encouraging your employees to continue participating requires frequent reminders of your plan and its value. It’s important to distribute supplemental educational content about your specific plan and the general benefits of 401(k) plans to keep your employees actively informed and reminded of this crucial employee benefit.
This results in continued and increased participation, while also boosting your employee retention efforts by reminding your employees of the value you provide as an employer.
Awareness Is The Key To Your Employee 401(k) Plan Success
When your employees fully understand and are frequently reminded of the value your employee 401(k) plan provides, they’re more likely to participate. This benefits you not just from an employee retention standpoint, but also by increasing the value of your plan and helping to lower your fees.
Learn how to maximize the benefits your company gains from its employee retirement plan. View Our Employee 401(k) Plan Optimization Video Series.
