As a Plan Sponsor, you have put together the best benefit package that you can for your employees. You then review participation levels and are disappointed with the results. If you would like to increase participation in your company benefit plans, often communication is the key.
Benefit plans can be very complex and involve a lot of details. Also, each employee situation is different and general terms can be confusing and not relevant to each individual employee. Here are some tips to help improve the communication process:
- In your benefit communications, offer goal setting and tracking tools. These tools should help the employee calculate the amount needed for retirement in a 401(k) Plan. It should also include Social Security and Tax amounts in the calculations.
- During open enrollment or at the time when an employee first becomes eligible for a benefit, provide the opportunity to speak with a specialist such as an Investment Advisor. Selecting investment options in a 401(k) Plan can be daunting and having someone there to explain the various options can help make the process easier for the employee.
- Define confusing terms. In a 401(k) Plan, terms like vesting, forfeitures, eligibility period can be difficult to understand, and different employee situations may require different applications of the terms. Provide explanations of all specific terms and have a contact the employee can reach out to with specific questions.
- Discuss with employees what they would like to see in their benefit plans. Ask what benefits are most valued and what isn’t being offered that they would like to see the company explore. Provide explanations as to why selected benefit options aren’t available and why certain offerings have additional expenses.
The more information that you can provide will help your employees better understand their benefit options and you may find a higher participation rate with that increased communication.
As the plan sponsor, when it’s time to audit your plan, it’s vital that you hire an experienced auditor to ensure your plan is in compliance. At Summit CPA we specialize in retirement plan audits. We have the ability to offer assistance entirely off-site with little or no distraction to your daily office routine. We also offer flat-fee pricing so there are no surprises on your bill when the job is complete. For assistance contact our office at (866) 497-9761 to schedule an appointment.