The Challenge

The employer’s 401(k) plan has above average participation due to automatic enrollment and automatic escalation features. The employer’s challenge is to get employees engaged with their financial planning so they are confident in their financial futures.

Many employers hold benefits fairs during open enrollment, providing employees an opportunity to review all benefits offered to them. Focusing on the 401(k) plan only during open enrollment events can give employees the false impression that they must make their 401(k) decisions only during the open enrollment period. How can the employer better highlight the benefits of a 401(k) plan and engage employees in the process?

The Solution

Celebrate the 401(k) plan with its own day. The employer has an established annual 401(k) Day celebration and, for 2015, looked to Milliman for help in developing a strategic plan and theme.

The 401(k) Day planning team, made up of Milliman consultants and the client’s human resources professionals, brainstormed and designed materials using the “Game of Life” theme, tying in life’s various stages with the features of the 401(k) plan. Participants encountered different life stages, from “starting your career” to “getting a promotion” to “paying for college.”

Employees advanced through each of the stations and were provided with activities and games while learning how the different 401(k) plan’s features could help them assume responsibility and plan for their financial future. The planning team worked to develop the activities and games for each station. For example, one game illustrated the negative impact of loans and in-service withdrawals. The game let employees visualize the weakening of one’s account balance and its ability to accrue compound earnings.

The Outcome

The 2015 401(k) Day celebration was well attended and employees eagerly participated in the activities. They were encouraged to make appropriate changes based on their individual situations and were provided the opportunity to enroll, increase their savings percentages, sign up for auto escalation, and designate beneficiaries.

With both automatic enrollment and automatic escalation features, the 401(k) plan already has excellent participation with higher than average deferral levels. Even with an already excellent participation rate prior to the 401(k) Day celebration, the following weeks saw a slight increase in participant activity including enrollment, deferral increases to take advantage of the full employer matching contribution, and beneficiary designations.

By having a separate 401(k) day celebration, the employer was successful in generating excitement around the 401(k) plan and further engaging its employees in their financial future.