Are Employers Doing Enough to Promote Retirement Plans?
July 3, 2007
Does your employer encourage you to participate in a retirement plan? It took my wife’s employer 6 years to actively promote their retirement plan.
A Tale of Two Retirement Plans
Today’s young workers won’t be able to rely on company pensions or Social Security when they’re old and gray so starting to invest right away in a retirement plan is vitally important. Unfortunately not all employers are doing their part to get this point across.
The human resources department at my company does a good job informing employees of the features and importance of our 401k plan via email, postal mail, and seminars. My wife’s employer on the other hand has done a horrible job.
After working for a local school district for 6 years, my wife just received her first promotional item, touting the benefits of the 403b plan available to her. They do mention it during district meetings at the beginning of every school year but until now that’s all the coverage the plan received.
Promoting Retirement Plans
The letter she received today shows her contributions for the last year and contains a hypothetical scenario of how much she could save for retirement with the 403b. It also answers generic questions such as:
– When a person can begin participating in the plan.
– How much someone can contribute.
– The available investment options.
– Where to call for more information.
I’m glad her school district finally decided to get the word out about the 403b plan and encourage teachers to participate, I just don’t think its right they waited 6 years to do it.
I’ve attended several seminars on our 401k options over the 7 years I’ve worked for my company. Everyone knows what a 401k plan is and most people are contributing.
In contrast my wife has discovered through numerous conversations that many of her co-workers don’t know what a 403b plan is and only a few of them are participating in it.
To be fair, her plan doesn’t offer an employer match while mine does. In addition, corporate jobs in my industry tend to pay better than school teachers so her co-workers may not have as much money to work with. However, I imagine that if you compared two corporations, one that promoted its 401k plan and another that did not you would find a higher participation rate in the company that encourages its employees to save for retirement.
With the days of pensions in the past and shrinking employer health benefits on the way it seems irresponsible for employers not to promote their retirement plans to their workers. How does your human resources department rate? Do they do a good job getting the word out or are they retirement plan slackers?
All posts by Ben Edwards