An hour-long retirement plan enrolment session with an employee might be doing more harm than good.
A new white paper from Diversified, a U.S. retirement provider, says simplifying the retirement savings plan enrollment process can help increase participation rates.
In 10-Minute Enrollment: Scaling Back Meeting Content to Drive Higher Enrollment Rates, Patricia Advaney, senior vice-president, participant solutions at Diversified, writes that a long session often includes the review an employer’s retirement savings plan, eligibility rules, employer match formulas, as well as an explanation of plan benefits. During this time enrollment can become a secondary focus and not always completed.
“Results from traditional enrollment meetings have fallen short,” said Advaney. “We’ve witnessed firsthand the higher success rates that occur when enrollment meetings are shortened to 10 minutes-focused only on why employees should be in the plan, not on a comprehensive review of plan benefits. Subsequent targeted communications can address the retirement savings needs of specific employee segments, and are most effective when they get the right message to the right person at the right time.”
Highlights from the paper include the following.
Keep enrolment forms within reach at all times
A return to paper might be “old school,” but having simplified enrolment forms can get the job done quickly and efficiently. Consider keeping a supply of forms in the cafeteria kiosk, the HR waiting area, and in the offices of all those who provide retirement plan information and education.
These forms allow participants to take action immediately as opposed to enrolling online at a later time. Employees should be required to complete an easy-enroll forms even if they decide not to enroll, as sometimes having to document that they declined a benefit is enough to get them to reconsider.
Create a sense of urgency
Asking employees, “Who is responsible for your retirement?,” positioning matching contributions as an integral part of an overall compensation package, and educating employees on the average deferral rate in their plan are all effective steps for creating a sense of urgency that can help spur enrollment.
Follow up with education
Education remains a critical component of retirement planning. If possible, new enrollees should have an opportunity for one-on-one sessions-onsite, online or over the phone that can be used to focus on fine-tuning the employee’s retirement strategy.
Measure success
Enrollment success can be measured in three stages by the following goals: get 70% of new employees to enroll at the initial enrollment meeting, get 50% of the remaining 30% to enrol when they become match-eligible, and get 50% of the remaining 15% to enrol if/when they receive an automatic employer contribution. This equates to more than a 92% enrollment rate over time—a goal that’s within reach of those implementing a 10-minute enrollment process.