Tuesday, September 24, 2019

Increasing Plan Participation Matters

You should care how much your employees are saving for retirement. Find out why in this first in a series of articles designed to explain the benefits of increasing retirement plan participation.
  • Streamlined compliance testing. Some plans must go through complex, annual compliance testing to ensure that highly compensated employees (HCEs) are not disproportionately benefiting relative to rank-and-file employees. Failing these tests can lead to added headaches and expenses: the employer may have to refund deferrals to HCEs or make contributions to non-HCEs in order to pass the test. The good news is that you can potentially avoid compliance testing failures through increased participation and contributions from non-HCEs.

  • Enhanced productivity. Actuaries estimate financial stress costs 15% to 20% of the total compensation paid to your employees.* Focusing on financial wellness can help reduce financial stress among your staff, creating more job satisfaction, and driving better business performance.
Look for future articles in this series highlighting strategies you can use to encourage plan participation.

*Measuring the ROI of Financial Wellness,” American Society of Pension Professionals & Actuaries, September 2018.