7 keys to 401(k) engagement
Offering a 401(k) plan to employees is only half the benefit; sponsors need to design plan features to maximize enrollment and communicate the advantages of the plan. With strong plan construction and sound communication and financial education campaigns to support it, employers can help workers save and plan adequately for retirement.
Based on suggestions from a Diversified retirement white paper and from Kristi Mitchem, senior managing director and head of global defined contribution for State Street Global Advisors, EBN has compiled seven tips for plan sponsors to help engage employees in retirement saving and planning.
1. No jargon or investment speak
“We use jargon we don’t even know is jargon,” says Kristi Mitchem, senior managing director and head of global defined contribution for State Street Global Advisors. SSgA’s survey of plan participants revealed that a large number of people don’t understand words that are common in investing nomenclature. For example, words like “bond” and even “fund” were not well understood. “Think about how to talk in plain, simple English without a lot of terms that confuse participants,” she says. “We encourage plan sponsors to do a jargon audit on their communications and watch for terms that might be off-putting.” And if you do use jargon, include a glossary.
[Image; Thinkstock]
