Grow Your Retirement Part 2: Educating Your Employees

Benefit education is an on-going process but there are some obvious times to focus on the retirement plan:

• Onboarding – New employees are excited about their job and more eager to learn about their benefits. This is prime time to get their attention. 
  
  

• Plan Changes – Example:  Changing from a DB to a DC Plan, changing the employer contribution, changing how Plan assets will be invested…. 
  
  

• In tough economic times, when you are asking for more, and able to give less, helping employees understand the long-term benefits of the retirement Plan will demonstrate caring and concern. 
  
  

• If participation is low, education can help reverse that trend.
   

Bring in your Plan’s trusted advisors to help you with employee education.  Your advisors will have many tools to make education interesting and productive.  Ideally, an employee meeting will include information about:

• The basics:  How to enroll and participate in the Plan. 
  
  

• A clear explanation of the Plan’s components  
  
  

• Understanding Replacement Ratio – This is the percentage of current income that an employee needs for their retirement years and is based on projections of expenses and lifestyle goals for retirement. 
  
  

• Personalized Replacement Ratio – Statement showing the employee’s current projected Plan benefit plus Social Security, expressed as a replacement ratio.  The statement should illustrate the effect of changing savings patterns to meet their targeted replacement ratio. 
  
  

• A Success Analysis – This is for the Plan Sponsor and shows what percent of employees are participating in the Plan.  It should include a benchmark for comparison.
   

Education is a ‘see and say’ experience, requiring consistent repetition of a carefully constructed message.  Done well, the return is invaluable! 

 

Lisa Pfautz
Markley Actuarial