View All Blog Posts

Retirement challenges and action

Special Guest Author: Frank Shimsky, President & CEO of Personal Communications, Inc.

Over the years at meeting after meeting with employers, I’ve heard a similar complaint, “Most of my employees aren’t saving enough for retirement; many don’t even receive the full match.” It’s common to read that most Americans aren’t saving enough for retirement even though, according to the Census Bureau, 79% of Americans work for an employer that sponsors a 401(k)-style plan.1 

Employers value the huge investment in their retirement plan but far too many employees are failing to take full advantage. Employee financial well-being, and their ability to save and protect themselves against unexpected life events, directly effects their engagement on the job.

So, what’s keeping employees from participating? We’ve found that for many, if not most, employees, it comes down to human nature. It’s simply difficult to get most people’s attention about their future selves. Too many of us are always going to, “do it tomorrow.” But too often, tomorrow never comes. Before an employee acts, it’s important, if not critical, that they appreciate how saving affects them personally.

The solution that I’ve found most effective is off-cycle 401(k) education. It’s a practical answer. Employers recognize there’s no time during open enrollment, especially with today’s healthcare changes, so dedicating time separately from enrollment helps give 401(k) the attention it deserves. 

At PCI, we’ve been able to help employers apply the same dedication to their retirement plan that they apply to the enrollment and education of other benefits. We accomplish this by using trained counselors to hold one-on-one retirement meetings with each and every employee. We recommend a personalized message, including the use of interactive tools and customized multimedia, which enables each employee to act when they see how the plan applies to them personally; based on their age, income and retirement goals. Using this approach, we’ve seen an average increase of 78% in employee participation and 66% in 401(k) contributions. 

Here are some of the best practices to achieve success:

Necessary attendance, never mandatory, must be emphasized by each employer. High attendance can be achieved by leadership’s message to managers urging them to encourage employees in their department or location to attend a meeting. This is a winning approach, since employees who are getting paid to learn are better learners and it creates buy-in throughout the organization.

One-on-one meetings averaging about 30 minutes, scheduled during the workday. Here, every employee can receive a message customized to their employer’s specifications and, with trained counselors, employers can be confident that there will be message consistency. With this active, versus passive, approach, we’ve seen over 80% of employees taking part in their employer’s retirement education.

An educational format that embraces financial wellness and increases appreciation of the retirement plan. Most participants are surprised they are less prepared than they thought, and are pleased to learn how 2% or 3% additional saving will help build a retirement-ready account balance. It’s important to note that you are providing counselors as educators, not investment advisors. This is especially important since counselors can often discuss how to round out the employee’s financial wellness with the offer (never sale) of Life and Long-Term Care coverage, designed to protect employees as they save, while helping to safeguard their income after retirement.   

Spousal information, in the form of a 401(k) Projection Statement, can be provided for each employee, based on calculations performed during the meeting on a sophisticated calculator.  

Retirement preparation is critical to an employee’s financial well-being. And employers want to see their employees take full advantage of what they’re offering in their retirement program. 

About the author

Frank Shimsky founded PCI in 1999 to accelerate the development, sale, and implementation of interactive employee communications. Since its formation, Frank has lead Personal Communications, Inc. to become the Benefits Industry leader in one-on-one interactive multimedia communications.

1 “Which employers sponsor defined contribution plans?” U.S. Census Bureau. Nov. 2016.

Posted on May 24, 2018 in Employee Communication

Tagged as