Lynn Unsworth, regional manager at the employers’ association of Capital Associated Industries, shares the following tips for handling employees’ worries:
- Don't give employees financial advice. Give employees the resources they need to make decisions, but do not give employees advice on selecting stocks and where they should invest their money.
- Educate employees on their options. Talk with employees about the restrictions and penalties that apply if they want to withdraw money from their 401(k)s. Employees need to be educated on the mechanics of the plan.
- Bring in investment advisors to meet with employees. Enlist your plan vendor to work with employees on their individual investment strategies. Employers need to make sure employees are engaged in a conversation with financial and investment advisors about their 401(k)s.
- Help employees avoid looking at their 401(k) performance every day. Employers need to reinforce to employees that a 401(k) is a long-term investment. Help them understand that they are investing for retirement.
- Release a benefits statement to all employees. Employees often underestimate the value in their hidden paycheck. Share with employees all the benefits your company offers to help them learn the value of their paycheck and what vacation and holidays are worth.
- Reassure employees that their money is safeguarded. Make sure employees know that their 401(k) is audited and heavily regulated by the Department of Labor and the IRS. Employees need to be reassured the money they are investing is segregated from the company's general operating funds.
Source: Capital Associated Industries, Inc. 2900 Highwoods Blvd., Raleigh, NC; telephone: 919-878-9222.