Inexpensive Ways to Promote Your 401(k) Plan to Employees
As you know, something really simple and inexpensive (or even free) can sometimes make a huge difference. For example, I would argue that the quality of the tomato can make or break a cheeseburger.
There are some very simple and inexpensive ways to increase awareness of your retirement plan that as a bonus can be done at almost any time. Yes, boosting awareness of your retirement plan can be a fairly big undertaking, and sometimes has to be—a quality provider can help you considerably, but that’s a story for another day. However, on the simple/inexpensive side of things, here are two interesting ideas.
1) Cultivate some vocal fans of the plan among your employees. In recent years, people have trended towards being more trustful of peers than of authority figures. If you bought your last car, toaster oven, or even shower curtain at least partly based on online reviews, you know how this works. No matter how compelling the ad campaign, what it claims probably becomes irrelevant to you if people who are like you didn’t think it was such a good deal.
The same could be applied to your 401(k) plan. You could consider the plan’s non-contributors, or low-contributors, to be the plan’s indifferent to negative reviews. On the flip side, you probably have at least a couple of all-star investors who are maximizing their contributions, diversifying properly, and attaining sizeable retirement balances as a result. Maybe somewhere along the way they have even come to understand the plan in some detail, and that’s no small achievement given all the different investments, plan rules and unfamiliar concepts.
Consider tapping into this group the next time you have a benefits awareness program or communication, or when you conduct enrollment or education meetings. Or really anytime. Find out why these folks are taking full advantage of the program. Maybe one or two of them would be willing to share their stories with those who are not yet convinced. And best of all, this is a nearly free way to raise plan awareness!
2) Put an article in the company newsletter. As a plan sponsor, you are probably looking for different ways to reach your employee population, finding that attacking your education program via multiple means is more effective than just using one way of communicating.
One creative and quite inexpensive (and therefore high-leverage) way to reach your population is to put something in your company newsletter or e-bulletin. An advantage is your communication will be seen by everyone, including those who have chosen not to contribute to the plan and those who have not yet met the plan’s eligibility requirements. And sometimes, participants are more likely to read a company newsletter article since it tends to be less technical, plus the plan sponsor is the one doing the communicating, which may also offer an advantage.
• Be brief. Enough said.
• Ask your provider if you can rehash a portion of something compelling that was previously given to participants. Maybe they can even supply the text for you.
• Go for seasonal. Newsletters are often geared to a particular season. Think New Year’s resolutions, etc.
• Be fun. This may not be the place to bore your audience with withdrawal provisions. Granted, retirement plans are not inherently fun, but try to look for a fun twist if that is in keeping with the rest of your publication. It’s much easier to make things fun with a retirement plan, than with, say, root canal therapy.
If you don’t have a company newsletter, maybe you can still circulate something. See what your provider might be able to offer that could easily be distributed at some time other than with the quarterly statements.
As another variation of this, we’ve seen some larger companies that have continuous video broadcasts looping in the break room and other locations on various topics. Consider a retirement plan pointer for this platform as well.
Think creatively, and you may come up with other simple ways of inexpensively communicating your plan to your employees. And keep following along for more 401(k) tips!
Scott Gehman, ERPA, CEBS
Retirement Plan Consultant
All investment advisory services are provided through Conrad Siegel Investment Advisors, Inc. (“CSIA”), a fee-only investment adviser registered with the U.S. Securities and Exchange Commission. This article contains general information about recent US tax reform and should not be relied upon as the basis for any investment, tax or legal decision. Please consult with your financial or accounting professional.