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Your company offers a 401(k) plan but is disappointed by the number of employees taking advantage of it. You would like to encourage increased use of the 401(k) plan. What are some things you can do to boost participation? |
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Answer: |
A growing number of employers are stepping up their efforts to encourage workers to save and invest for retirement by offering tools that put their 401(k) plans on autopilot, according to a recent study by Hewitt Associates.
The study found that:
- nearly two-thirds of companies (64 percent) said the 401(k) plan is their primary retirement savings vehicle;
- one in five (19 percent) automatically enroll employees in their 401(k) plans;
- more than a quarter (26 percent) provide automatic rebalancing;
- almost 20 percent offer or plan to offer contribution escalation features, which enable workers to automatically increase their 401(k) contributions over time; and
- almost two-thirds (63 percent) offer pre-mixed/lifestyle funds.
In addition to automating features of the 401(k) plan, an increasing number of companies are offering workers tools that make the investment selection process easier:
- 91 percent of companies provide investment education to employees; and
- 37 percent offer outside investment advisory services.
Source: Hewitt Associates, LLC, 100 Half Day Road, Lincolnshire, IL 60069; telephone: 847-295-5000. |
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