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401(k) Communication and Enrollment Strategies


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Are we just yelling, or actually getting results? John Friar, AIF, of HJB Financial helps employers understand how best to enroll employees and communicate the benefits.

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401(k) Communication and Enrollment Strategies

  1. 1. Presented By: John Friar, Financial Consultant/Director of Corporate Retirement Plans for Hausmann-Johnson Bauch Financial 401(k) Communication & Enrollment Strategies Are we just yelling or actually getting results?
  2. 2. LET’S START WITH ENROLLMENT What are the 3 questions every participant has to answer at the time they enroll into their 401K? Who is there to answer those questions?
  3. 3. WHAT QUESTIONS DOES A PARTICIPANT HAVE TO ANSWER AT ENROLLMENT? 1. Should I participate or not? 2. How much should I participate in the plan? 3. What investment options should I choose? These choices can lead to “Auto-Grounded”
  4. 4. d • Make participation easy (Auto-Takeoff)Action 1 • Establish the initial savings rateAction 2 • Implement Future Enrollment (Re-enrollment)Action 3 Behavioral Finance Actions for Enrollment
  5. 5. d • KEEP IT SIMPLE (KIS)Action 4 • Give them someone to talk toAction 5 • Talk to your advisor to see if these options make sense for your plan Action 6 Behavioral Finance Actions for Enrollment cont…
  6. 6. ADEQUATE SAVINGS LEVELS PUT IT ON AUTO AUTOMATIC ENROLLMENT 91%PARTICIPANTS STAYED IN AUTOMATIC ESCALATION (DEFAULT FEATURE) AUTOMATIC ESCALATION (VOLUNTARY CHOICE) 88%PARTICIPANTS STAYED IN 6%PARTICIPANTS OPTED IN Source: The Principal Financial Group. Data based on a combination of 42,806 participants opting out of Automatic Enrollment or Automatic Increase as of April 25, 2013, and 65,662 opting in to Principal Step Ahead Retirement OptionSM as of April 31, 2013.
  7. 7. It’s a Changing World in Employee Communication What used to be called effective communication, may no longer work
  8. 8. Rethinking Retirement Plan Communication “A successful retirement communications program requires more two way communication along with strategies that help participants envision what retirement will really look like for them personally.”
  9. 9. Engage and Empower Through Communication •Delivering personalized and targeted communication (Peer Comparison) •Making sure your provider has the technology to provide this at a reasonable fee •More efficient techniques for communication delivery (smart phones, tablets, email) •Life-Stage programs targeted at age segments (Boomers vs. Gen Xers vs. Millennials Segmentation Channel Optimization Data IntegrationMetrics
  10. 10. One-on-One Meetings Still Work RESULTS GENERATED BY 1:1 MEETINGS Among plan sponsors: Among employees: • 98% agree it increased employee understanding of their benefits 1 1 Based on data from Retirement and Investor Finance, the Principal Financial Group, December 2013 2 Individual Investor Reporting, the Principal Financial Group, January-December 2013 3 Results of the Principal Financial Group Retire Secure Participant Survey , December 2013 • Over 58,500 1:1 meetings held; and 40,800 actions taken (new participation, increased deferral, automatic increase election) in 20132 • Participation is 23% higher and Average Deferral is 15% higher when 1:1 meetings are offered 2 • More than 96% of participants responded that they were satisfied with the 1:1 meetings in 20133
  11. 11. Employee / Participant Communication and Education Services •Identify organizational goals and measures, and establish written action plan •Identify proper tools including distribution media, non-traditional options and vendor resources •Develop an implementation plan including group and individual meetings, and organization resources •Ongoing reviews and modifications of written service agreement •Determine if participant outcomes are meeting plan objectives 5 WAYS TO HELP WITH BETTER COMMUNICATION
  12. 12. SUCCESSFUL RETIREMENT PLAN 1. Consider “success” as it relates to your plan participants and the role you play in impacting the plan’s success. 2. Work with your financial professional to evaluate your plan and create a strategy. 3. Encourage participants to meet with a financial professional to keep on track.
  13. 13. SO HOW DOES ALL THIS HELP Plan Evaluation Higher Participation Better Communication Help employees achieve retirement goals Opportunity for orderly exit More engaged, productive employees Decreased health and benefit expenses
  14. 14. Thank you! For More Information Contact: John Friar Financial Consultant/Director of Corporate Retirement Plans Direct: 608-252-9634