Saving for retirement is not a new concept. Market gains, compounding interest, and time all contribute, but they mean nothing without active participation. If you're finding that employee engagement is lower than expected, here are a few things to consider.

The Plan's Investment Advisor

Uniglobal does not offer investment advice to clients, but we do work with a vast network of advisors who have made retirement plans part of their core services. A proficient financial advisor in your corner can spur participation in your retirement plan. Though service models vary among advisors, we've seen, at the minimum, these key services provided:

• Annual investment reviews with leadership/HR
• Group education seminars/webinars
• One-on-one participant planning sessions
• Wellness check-ups
• Proactive investment selection monitoring

Leveraging the financial professional to support you and your plan participants is one way you can provide value. 

The Plan's Record-Keeper (Asset Provider)

The company that accepts and holds participant contributions and provides the investment platform is what we call the record-keeper or asset provider. This provider is the face of your retirement plan. Participants generally log in, review their account and investments, and interact with the provider on a number of day to day items. A good provider will work in concert with your financial professional to provide you with materials designed to assist your participants in planning and saving for retirement. 

Resources and services generally offered by the asset provider/record-keeper:

• Enrollment Materials and Forms
• Investment Information (prospectuses, et. al.)
• Disclosures and other plan required notifications on investments
• Participant Website and Apps
• Retirement Calculators and Planning Tools to show how on track participants are for retirement

The Plan Structure

There are many design considerations for boosting employee engagement. Automatic features such as automatic enrollment and auto-escalation have proved more often than not to increase plan participation. Since these components require amendments to the plan's governing documents contact your TPA to get the advice you need to make an informed decision. 

The addition of an employer match component or enhancing an existing match formula may also encourage participants to begin deferring, or, if currently deferring, increase their deferral rate to maximize matching potential. Consider, too, the frequency of matching deposits. Calculating and depositing the match each payroll period is often more gratifying for participants then an annual match deposit at year-end.

Pre-tax deferrals are provided in a 401(k) plan but does your plan also offer Roth contributions? Having the ability to select one or the other, or both, allows participants to better control how they save for retirement. Permitting Roth contributions to your plan may encourage participants to contribute. Roth contribution limits in a employer-sponsored plan are the same as pre-tax limits ($19,500 for 2020 and 2021); unlike the Roth IRA, Roth contributions are not limited by participant income.

Tips For What You Can Do Right Now

Much of the above takes planning and involves multiple parties. So what can you do right now to engage with your employees and plan participants?

• Active (employed) Plan Participants
  • Remind them they are eligible for the plan;
  • Provide the SPD (again);
  • Introduce them to your financial advisor for the plan;
  • Inquire about deferral elections - if the plan allows for participants to increase/decrease their elections at any time it might be worthwhile to inquire before year ends, especially if salary increases are expected in the next year, they could drive the increase into the plan.
• Inactive (terminated) Plan Participants
  • Annual (or more frequent) outreach to verify current contact information
  • Provide distribution paperwork and encourage Participants to consult with the Plan's advisor, asset provider, and/or their personal CPA regarding distribution options

Active and Inactive Participants can benefit from periodic requests to update beneficiary forms to capture recent life events (change in martial status or birth of a child, for example).

Engaged and educated participants contribute more. If you're taking the time to pull your advisors together to help participants save it will show and they will want to actively participate in your plan.