COLLECTED WISDOM™ On Employee Education and Participation

Is DC Plan Communication and Education Dead? - Summary: Now that plans can be automated to a large degree, do communication and education have roles to play? They do indeed. Getting workers into a 401k plan, increasing their savings rate, and improving their diversification through default mechanisms is not necessarily synonymous with financial security. Located at: Workforce Management (free registration may be required), January 2008. Click on headline for full article.

Will Automatic DC Programs Eliminate Need for Education and Advice in the Workplace? - Summary: Given that the Pension Protection Act addresses plan sponsors' primary concerns, do we still need to offer education and advice to employees? Can't we simply auto-enroll, auto-escalate, and auto-allocate, and call it a day—or a decade? Located at: Journal of Financial Planning, September 2007. Click on headline for full article.

Study Indicates Simplicity Key to Maximizing Plan Participation - Summary: While automatic enrollment is sure to have a dramatic increase in benefit plan participation, CitiStreet says recent research shows that for plan sponsors who have not opted for that feature, simple early plan communication is a major key to increasing participation. Located at: 401khelpcenter.com, May 2007. Click on headline for full article.

Exposing the Myth of Participant Education - Summary: The myth that colorful participant statement stuffers and interactive web sites will turn your 401k plan participants into little Warren Buffetts by reading and interacting with them is only that, a myth. Let's be honest and finally admit it - we are failing to provide our participants with the services and choices they need to make effective investment decisions. Located at: 401khelpcenter.com, May 2005. Click on headline for full article.

The Importance of Financial Communication for Participation Rates and Contribution Levels in 401k Plans - Summary: Building upon previous research, this analysis examines the impact of firm-sponsored financial communication on employee 401k participation and contribution rates. The study results appear to confirm that enhanced financial communication has important beneficial effects on plan participants’ financial decisions. In addition, the evidence suggests that employers with more sophisticated, web-based communication programs have higher participation and contribution rates. Located at: Pension Research Council, The Wharton School, , February 2005. Click on headline for full article.

Strategies to Discourage Employees From Opting Out of a Plan - Summary: We are going to start automatic enrollment in our retirement plan at 1% for all eligible employees. We want to discourage our employees from opting out of the plan. What are some strategies we can use to keep them enrolled? Located at: 401khelpcenter.com, February 2005. Click on headline for full article.

Non-Savers Unmoved by Match, Education - Summary: You might like to think that non-participants and participants with low savings rates just need better education, or maybe a timely reminder of the money they are leaving on the table. However, according to the findings of a new study, you'd be wrong. Located at: Plansponsor.com (free registration required), February 2005. Click on headline for full article.

Boosting Participation and Participant Contributions - Summary: The evidence suggests that employers can increase both participation and contribution rates by making financial education materials and retirement income projections more widely available. The communication methods are also important. More sophisticated, web-based communication programs tend to result in greater enrollment and savings rates than other forms of communication. This article examines the ways in which employee and plan characteristics and communication programs influence employees’ 401k plan participation and savings behavior. Located at: Watson Wyatt Worldwide, February 2005. Click on headline for full article.

How Can We Get All Of Your Employees To Participate In Your 401k? - Summary: Employers offer a 401k plan because they want to attract and keep talented employees. So, if you are an employer and have one, why not strive to get as close to 100% participation as possible? Located at: 401khelpcenter.com, January 2005. Click on headline for full article.

Seven Characteristics of Effective Financial Education Programs - Summary: Companies that want to offer financial education for women--or employees in general--might want to consider the characteristics of successful programs identified by the nonprofit Institute for Socio-Financial Studies in Middleburg, Virginia. Located at: Workforce Management, January 2005. Click on headline for full article.

Financial Counseling Critical Component of Retirement Planning; Education Not Sufficient - Summary: A new study conducted by Ernst & Young LLP and ExecuNet revealed that personalized financial counseling is critical to help employees effectively manage retirement planning. The survey of human resource and employee benefits professionals found that financial education alone is not enough to influence a change in employee behavior. Located at: 401khelpcenter.com, November 2004. Click on headline for full article.

Directory of Retirement Education and Communication Firms - Summary: Are you having as hard of a time as we do in finding independent retirement education and communication firms? To solve the problem, we have put together this follow directory. Download it at no cost and if you know of a firm we missed, let us know about them. Located at: 401khelpcenter.com , October 2004. Click on headline for full article.

Educating Pension Plan Participants - Summary: Individuals who do not understand financial mathematics, expected rates of return on investments, and the level of income needed to meet consumption expectations in retirement, are very likely to have considerably less retirement income than they desire. Better financial education is necessary if workers are to achieve their retirement objectives, and financial literacy is key to informed retirement saving decisions. A central issue worthy of debate is who should pay for financial education and how it should be provided. Located at: Pension Research Council, Wharton School , August 2004. Click on headline for full article.

15 Things Every Worker Should Know About Their 401k Plan - Summary: When it come to knowing about and understanding their 401k retirement plans, most workers are in the dark. As a plan sponsor, you can correct this by being sure that everyone of your employees is be able to answer at least these 15 questions. Located at: 401khelpcenter.com, July 2004. Click on headline for full article.

Insights on Boosting 401k Plan Participation and Interaction - Summary: Plan sponsors are taking action to improve defined contribution plan value by embracing a behavior-based approach for boosting employee interest, interactivity, and appreciation. Located at: Hewitt.com , June 2004. Click on headline for full article.

Falling 401k Participation Rates – Reversing a Negative Trend - Summary: So what can companies do to rekindle the desire of employees to participate in 401k plans? Here are some suggestions. Located on: 401khelpcenter.com, January 2004. Click on headline for full article.

Participant Education Comes Up Short - Summary: In spite of the hundreds of millions of dollars their employers spend on education, participants appear more confused than ever about even the most basic aspects of their 401k plans. "The data make it abundantly clear that a new educational paradigm is needed that matches the way in which participants like to learn," echoes Warren Cormier, co-chair of the Society of Professional Administrators and Recordkeepers (SPARK) Research Group, which has conducted a series of in-depth studies of participant education. "Otherwise, it's reasonable to expect that employee education will continue to receive low satisfaction scores among participants and plan sponsors." Located at: Plansponsor.com (Free registrations required), June 2003. Click on headline for full article.

Interpretive Bulletin 96-1; Participant Investment Education - Summary: This interpretive bulletin sets forth the views of the Department of Labor (the Department) concerning the circumstances under which the provision of investment-related information to participants and beneficiaries in participant-directed individual account pension plans will not constitute the rendering of "investment advice" under ERISA. This guidance is intended to assist plan sponsors, service providers, participants and beneficiaries in determining when activities designed to educate and assist participants and beneficiaries in making informed investment decisions will not cause persons engaged in such activities to become fiduciaries with respect to a plan by virtue of providing "investment advice" to plan participants and beneficiaries for a fee or other compensation. Located at: U.S. Department of Labor , September 2003. Click on headline for full article.

16 Ways to Boost Participation in Your 401k Plan - Summary: Some ideas that could help boost participation in your 401k plan and turn your employees into Retirement Income Consumers. Located on: Dennisackley.com , October 1999 . Click on headline for full article.

How To Increase Employee Participation - Summary: It is the age old issue of how to increase employee participation in your 401k plan. We know how crucial it is to the overall success of the plan – particularly to the highly compensated employee group. High participation also helps in creating a positive attitude towards the company and helps greatly in employee retention. So, how can you increase participation in your plan?  Located on: 401khelpcenter.com. Click on headline for full article.

Ten Keys to Successful 401k Communications - Summary: Here is a quick guide to help you outline a successful 401k education program. Located on: 401khelpcenter.com, March 2001. Click on headline for full article.

Internet Resources For Better Employee Investing - Summary: Most 401k plan participants want and need better investment education. Nearly all plan sponsors provide investment information of some form, but one tool that is often not promoted is the Internet. The Internet contains a wealth of free, useful and informative data related to 401k investing. Sure, there is a lot of junk also, but you can help your employees avoid these areas by directing them to high quality sites. Located on: 401khelpcenter.com. Click on headline for full article.

Fiduciary and Quality Issues in Investment Education: Tip Sheet for Plan Sponsors - Summary: Tips for improving you employee education. Located on: Investment Horizons, September 1999. Click on headline for full article.

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