It’s important to help your employees understand the importance of participating and working toward retirement readiness.  This preparation can do a lot of good at helping them reach a financial peace that can positively impact the morale of your work force.

A staggering 68% of working-age people (25-64) did not participate in an employer-sponsored plan.*

Additionally, the media net worth among households near retirement (ages 55 to 64) show that only about a quarter can expect an adequate cash income stream from their retirement savings.

Here are some tips to help encourage your employees to participate in your 401k:

  • Do a great job of designing a plan to meet the company's goals, taking into account other pension plans, if any, demographics and employee investment sophistication. Hire a qualified consultant to help. Involve a couple of key "rank-and-file" employees in the process.
  • Shorten or eliminate the waiting period for new employees to enter the plan. You are more apt to get a new employee to enroll during your orientation meetings when you have their full attention and can explain the benefits to them in a small group than you are one year down the road.
  • Provide a matching contribution. The idea of "free" money has a strong appeal, even if it is only a dime on the dollar. The larger the match, the bigger the impact on enrollment.
  • Provide loans and hardship withdrawal options. Many employees don't want to put money into a plan that they can't get to in an emergency.
  • Furnish lots of good plan information. Regularly tell your employees about the plan and the benefits to them. Do this through more than just one medium. Use emails, newsletters, intranet, etc.
  • Ensure that a broad range of investment options are available. The day of providing just three or four options is gone. The average plan today has 10.6 options and it is still growing. A good plan will provide from 10 to 15 options that are well balanced between index funds and managed funds -- including target-date funds. But remember that more than 20 options can create confusion and complexity.
  • Demonstrate to the plan participants that you are monitoring the investment options by providing them with regular reports that provide net performance for each option against an appropriate index. Change funds that no longer meet the Plan's criteria for investment selection and communicate this to all participants.
  • Provide an investment advice service or offer one-on-one meetings to participants by a qualified financial advisor to help participants ensure that they will meet their retirement goals.
  • Provide daily internet access to asset and balance information. Better yet, offer mobile capability to access their information. Allow participants to trade reasonably often. When an employee feels in control of their assets, they feel better about being a part of the plan.
  • Hold 401k meetings quarterly. These are great opportunities to communicate plan benefits and features. Remember, you need to sell the plan and the more opportunities you give your employees to enroll the more likely they are to join.
  • Consider strongly automatic enrollment. Plans see significant increases in employee participation when automatic enrollment is employed.

For more information on retirement savings options offered through Land of Lincoln Credit Union, CLICK HERE or call 844-222-7788.


*Current Population Survey U.S. Census Bureau – March 2012 and article source: