How many employees do you have ages 35-50? Your Generation X employees are in prime earning mode, but studies show they aren’t saving for retirement like previous generations.
While it’s not really your job to make sure your employees are saving for retirement, having a 401(k) plan among other benefits can help you both.
There are a few ways you can help Gen X – and your entire workforce – get on the retirement savings bandwagon:
Have a good provider
Giving birth to a 401(k) is like giving birth to a baby. It may sound painful, but what this means is that it requires you to look out for its well-being.
Don’t try to go it alone. You need a provider who can help guide you through the decisions of the plan and with some of the burden of responsibility.
A good retirement plan provider offers tools such as an online retirement calculator that shows employees how a 401(k) contribution affects their paycheck or helps them determine how much they should contribute based on their retirement goals.
A provider also gives timely, useful information and helps you communicate with employees.
Maintain good communication
From emails and retirement calculators to information about their service, your provider should keep you and your employees up-to-date.
And the communication doesn’t stop with the provider. You play a role in this, too. Don’t be a passive administrator.
Although you’re paying a vendor or provider to take on some of the administrative burden of a plan, you should be an active program endorser – help the vendor connect with your workforce.
For example, you may receive posters or other materials about retirement plan changes. Pass those along or make them available for all employees to see – like in a breakroom. Or, let’s say the provider sent an email about enrollment. A reminder from you may be the encouragement one of your employees needs to get started saving.
Oftentimes, your employees take their cue from you. If your employees see that you’re excited about what the plan offers, then they’ll feel more inclined to be involved.
Accessibility to service
A great way to encourage participation in a 401(k) is to make it easy for employees to sign up and access their information.
Generation X is self-sufficient, and they want to be able to manage their own details. So, whichever provider you choose, it should offer online enrollment and contribution selection along with 24/7 access so employees can view or make changes to their account.
Also included on the interactive site should be information about the investment options, plan details, forms and documents, FAQs and the tools to help users manage their savings portfolio.
Matching a percentage of contributions
Just a 401(k) plan as a benefit is a good thing. If you go a step further and match a percentage of the employee’s contribution, it can be a game changer.
For you, there are potential tax advantages to employers who offer a match to contributions.
For employees, having a match is an additional incentive for them to participate in the plan, because they earn money on their investment – regardless of what’s going on in the financial markets.
A 401(k) matching program is a budget item. If you want to offer a match, you can start conservatively with a small match percentage to see how many participants respond. If it’s well-received, you can budget for more later.
Why offering access to a 401(k) plan is a good move
- You can attract better job candidates. It is the No. 2 benefit after health insurance that employees want.
- Matched contributions may be tax deductible.
- For job candidates who may be weighing the benefits of potential employers, matching a percentage of 401(k) contributions could be the reason they choose you over a competitor.
- For employees, it’s a way to save money on a pre-tax basis.
While it’s never too late to put money into a 401(k), retirement saving for Generation X can’t start soon enough. Generation X has a lot vying for its time and finances. While it’s prime earnings time, it’s also prime acquisition time. They’re also busy setting up homes, having children and sending them to college, caring for aging parents … the list goes on.
When you show you care about your employees – whether it’s their work-life balance or their retirement savings – they’re happier in their jobs. And, happy, engaged employees are more productive employees. By having benefits that employees need and want, it can be a win for everyone.
Offering big-company benefits is just one way that a professional employer organization can help your business attract and retain good talent. For more tips, check out our Step-by-Step Guide to Professional Employer Organizations (PEOs).