Auto-enrolment and auto-escalation. Get people involved as soon as possible and, like it or not, make the choice to participate not so much a choice as a more a chance to opt out if they really genuinely don’t want to have any retirement savings at all.The plan proposed the most complex highway interchange attempted in Ontario to that point. (Photo credit: Wikipedia)
By turning it into an automatic routine and not a thick pile of investment prospectuses and fee disclosure information and projected outcomes and disclaimers to be handled by individuals with no financial management skills whatsoever, you might be doing participants a favor.
Then, by cranking up the knob on the auto-escalation machine, those deferrals can go from a little to quite a bit, but the participants’ pain level will hardly be affected. They may not even notice. And they will thank you in the very long run.
Plan sponsors can turn their 401(k) plan into a pension fund like plan with these auto features.
Please comment or call to discuss how you can help your employees to a successful retirement.