5 Ways to Drive Employee Retirement Savings Participation
by Robert DeVries
Financial planning is often a catch-22: young people have ample time and opportunity to save but choose, instead, to spend money as quickly as they earn it while those nearing retirement believe they do not have ample time to create a solid portfolio. Employee retirement participation, however, is a savings plan for everyone. While many businesses that offer employee retirement plans are striving to ensure a healthy wealth management plan for their employees upon retirement, their methodology may be lacking. Our wealth services firm in Satellite Beach, FL – Melbourne/Brevard area has compiled a list of retirement participation factors created to escalate the number of employees who opt to participate in the retirement plans offered by their employers.
A Culture of Awareness
It is paramount for the company to make sure that employees are aware of the company’s retirement plan. While this information is often included in new hire packages, the sheer amount of information surrounding new employees at this time may be overwhelming. Along with written and oral information pertaining to employee retirement plans, add a series of follow-up emails, notes tucked into paychecks or direct deposit stubs, and reminders at all employee meetings.
Many employees believe they do not earn enough to substantiate long-term investments such as retirement participation. By automatically enrolling employees into an employee retirement plan, with an option to opt out, employers can meet retirement participation goals and employees are better prepared for their financial futures.
Retirement as a Benefit
The union between employer and employee, which was once considered a life-long bond, is at best tenuous in today’s business world. Employees are often swayed by benefits, and a matching employee retirement plan is a realistic savings benefit that can encourage permanence, as well as employee satisfaction and retention.
Encourage participation by communicating to employees the overall employee participation rate, deferral rate, and income replacement ratio. The company might sponsor a special party or event if goals are met. Emails can be sent to prompt more saving; for example, an email to those not deferring, or an email on the employee’s birthday as a reminder to increase his or her deferral rate.
These methods may help increase employee retirement participation, increase job satisfaction, and keep employees on the payroll longer. For more information on how our wealth services firm in Satellite Beach, FL – the Melbourne/Brevard area can assist individuals and businesses, give us a call at (321) 773-7773 and speak with one of our knowledgeable WealthCoaches™.