Are you using your 401(k) lure effectively?
Ask Robert Garcia what benefit he offers to attract the best employees and his excitement will almost bowl you over. “We offer a 401(k) plans with a 50% match!” he grins. Garcia’s benefits manager isn’t so excited.
“It’s a super benefit, but we only have about 14% participation in the program. We have a substantial number of blue-collar workers, and apparently, retirement savings isn’t a big priority.”
"What I see is, Joe Lunchbox everyday people don't understand the 401k benefits and aren't involved," said Patrick Vandenberg, manager of the Consumer Credit Counseling Service in Milwaukee. If we had a high school course that taught the value of compound interest along with English composition and Biology, we’d have better 401(k) participation, but until then, the burden for teaching employees the value of retirement savings rests with the employer. The PEO can help.
We’ll start by helping you get the word out about how much an employee stands to gain from contributing to a 401(k) retirement plans. If you offer an employer match and you don’t advertise that to potential recruits and current employees, you’re missing a great retention opportunity. In addition to getting the word out, consider easing eligibility for the plans. Many companies are reducing waiting periods to thirty days, or signing employees on immediately.
Pay close attention to helping employees understand that this is a long-term investment. Currently, 68% of employees cash out their plans when they leave the job, blowing retirement savings and incurring tax penalties. Most are simply not properly educated about the consequences of such a move.
Call us about the availability of training materials to help your employees see how the company 401(k) benefits them. Get the most out of this valuable recruiting and retention tool!
(See, Joel Dresang. “401(k); It’s a Benefit Employers Use as a Lure, But Workers Aren’t Completely Hooked.” Milwaukee Journal Sentinel.. Business; Pg. 01D.)
AmCheck offers nationwide 401k Benefit & 401k retirement plans services. Get a quote.