Use of automatic enrollment in defined contribution plans has grown considerably in recent years as plan sponsors seek to boost employees’ participation and retirement savings. Concerned about the fact that only 32 percent of workers nationally who have access to a 401(k) or 403(b) plan participate, employers are moving to automatic enrollment out of a sense of responsibility.
Two-thirds of American workers are not saving enough to retire comfortably, according to several studies. Most have access to retirement savings plans but fail to take full advantage of them. U.S. Census Bureau researchers announced in 2017 that about 80 percent of Americans have access to an employer-sponsored retirement savings plan. However, only 32 percent of workers participate. This alarming statistic illustrates why improving plan participation and education has become a top priority for plan sponsors.
Plan sponsors must keep up with the ever-changing rules and regulations regarding keeping their participants informed. However, increasing participation rates is vital to your retirement plan. Although you may not have given much thought to the way your employees interact with your retirement plan’s web portal, user experience has a significant impact on participant engagement. The good news is that a full-featured, responsive website for your plan likely will engage and excite your employees, and thus promote participation rates. Move forward from archaic paper forms and encourage the use of technology for efficiency and safety to drive plan participation.