401(k) incentive to enroll?
dbutton111
165 Posts
Has anyone used an incentive plan to boost 401(k) enrollment? We are thinking of having a one month "sale" and anyone who joins the 401(k) for the first time would receive a prize (something like a $10 gift certificate). If it's successful we can do it again later in the year.
Just some background before you all think I've gone off the deep end. We have had a very difficult time with the non-discrim testing. OK, we fail every time. We have good participation at our corp office, which is, of course, where our highly comp'd reside, but we have 1000 employees in over 42 states and 250+ locations. We can't meet with the employees one on one, do meetings, etc. because of the geographic diversity of our employees. Can't do telecons or web demos either because 95% of our employees are on federal gov't sites and can't do company "work" while on the clock. So it's been very hard to reach those that aren't here locally. We mail them packages and flyers and pamphlets. Do paycheck stuffers and tons of information is on our employee internet site. But it's not working. Even put green "dollar bills" in paychecks with the words "FREE MONEY" on them and information on the 401(k).
So, since education isn't working we came up with the incentive idea. I know it seems like the $10 gift certificate is a pretty poor prize, but people go nuts over the silliest things sometimes. We thought it'd be worth it to at least try.
Your thoughts?
Just some background before you all think I've gone off the deep end. We have had a very difficult time with the non-discrim testing. OK, we fail every time. We have good participation at our corp office, which is, of course, where our highly comp'd reside, but we have 1000 employees in over 42 states and 250+ locations. We can't meet with the employees one on one, do meetings, etc. because of the geographic diversity of our employees. Can't do telecons or web demos either because 95% of our employees are on federal gov't sites and can't do company "work" while on the clock. So it's been very hard to reach those that aren't here locally. We mail them packages and flyers and pamphlets. Do paycheck stuffers and tons of information is on our employee internet site. But it's not working. Even put green "dollar bills" in paychecks with the words "FREE MONEY" on them and information on the 401(k).
So, since education isn't working we came up with the incentive idea. I know it seems like the $10 gift certificate is a pretty poor prize, but people go nuts over the silliest things sometimes. We thought it'd be worth it to at least try.
Your thoughts?
Comments
Dutch2
We have a similar plan its called a "Safe Harbor" and we do not have to do the discrim testing. Because everyone who is eligible for the plan receives a contribution even if they are not participating by contributing themselves.
Lisa
~~"Sock it away" I LOVE IT!! :-))
I'd love to here other creative ways that other companies have encouraged employees to contribute to benefit accounts.
Anne Williams
Attorney Editor
M. Lee Smith Publishers, LLC
We've thought about negative enrollment but the owner of the company is against that - he doesn't want to force anyone to contribute.
Yes, we do have quite a few lower paid employees ($10-$15/hr) and I know that is a factor. But I'd be happy if they contributed just 1% - that's the way it often starts, just by contributing 1%.
So, we've sort of been stuck with the problem and haven't found any way to entice employees to enroll.
Thanks for the suggestions - love the sock it away idea!
Invite your ee's to visit SSA's website where they can enter info and get an estimate of what their benefits will be.......................Trust me, unless they like poverty, most will run to your office with mouse still in hand wanting to enroll.
I have used cutsey-type themes in the past, however, I have found that a stone-cold approach has worked best.
Gene
Sorry, but if I'm an average Joe who's never been in a 401(k), brochures and flyers would never convince me. I wouldn't sign up unless you sat me down in a conference room, had someone explain it to me, and hand me the form.
Since that's not possible for you, you might tell your boss that negative election may be your only solution. Here's an article about new flexibility for opt-out enrollment, such as linking automatic enrollment to raises:
[url]http://www.hrhero.com/hl/070204-tip-401k.shtml?HLw[/url]
Good luck.
James Sokolowski
HRhero.com
But since I've already finished my last enrollment before retirement, I'll let my successor work on this one!