Cash-back reward 401(k) system builds retirement savings

English: Employees Retirement System of Texas
English: Employees Retirement System of Texas (Photo credit: Wikipedia)

There needs to be a way to incentivize employees to save more for retirement. This option may help them save while doing the thing they love most, spending. There needs to be more and more automatic features in the 401(k) plan platform for it to succeed. Plan sponsors should investigate this and other options to promote saving.

Under the SaverNation plan, employees would be able to get retirement savings cash back on purchases made at more than 500 merchants’ websites.Participants could take part by logging onto a centralized SaverNation website and making the purchases, which would then pass from 1 percent to 25 percent of the cost back into their retirement account. Multiple or repeat purchases would only end up feeding more cash into their accounts.

The system is already being used by investment managers across the country, who’ve been able to use the simple nature and easy logic of SaverNation’s retirement savings benefits to offer as an add-on to employee systems.

“Here’s an easy way for employers to improve their employees’ financial lives,” said ERISA attorney Ary Rosenbaum, who’s included the system as an automatic feature of the open MEPs he’s been sponsoring in Florida.

“It also offers real value to sponsors. For example, encouraging the rank and file to get in the habit of saving while they spend can directly lead to higher annual contribution limits for highly compensated employees in plans failing testing.”

This is a great option for plan sponsors to encourage their employees to save for retirement. It is worth investigating for all plan sponsors.

Please comment or call to discuss how this might work at your company.

Posted via email from Curated 401k Plan Content

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