As it relates to employee benefits, if there were any one single challenge that most plan sponsors deal with, it might very well be: how to engage and convince employees the need to begin thinking about, and plan for, retirement as early in their career as possible.
Despite everything that is reported in the media about retirement ‘un-readiness’, inertia is a very powerful force that prevents people from tackling the issue. Why? Because there are many other more pressing issues to deal with, and tackle. Until it is too late. And then, of course, there is despair and frustration. Can some of that be avoided?
If there is one specific statistic that catches your eye, it is the 45% difference between the percent of people who think it is important to know how to determine how much to save for retirement (78%), and those who are knowledgeable about it (33%).
Question is: how do we narrow this gap – and make the force of inertia work for us? With 64% of the respondents saying they could reduce their budgeted expenses by 10% or more, there clearly is room for proactively engaging people to save for retirement.
Besides, with only 12% preferring to opt-out of 1% incremental increases in auto-savings, the likelihood of narrowing the action-gap is also higher.
So now the residual question is: how do we best engage employees and help them save for retirement, besides education and auto-enrollment?
Can we incentivize people to continue staying in the plan? What incentives can be given (besides the traditional ways such as employer match, and the like), for continuing to participate in the savings plan? Do those incentives have to be only financial? Could there be some kind of non-financial perks? How about career related training or additional education, or additional time off, or prime projects based on skill sets? Or cross training in other areas of the company? Can there be others?
Feel free to participate in the dialogue and provide your ideas.