Your work force may include a number of employees who are not taking full advantage of your retirement plan and are at risk of not having enough savings to retire comfortably. How can plan sponsors engage employees and encourage them to use their retirement plan effectively? Tailoring employee communications and education can help. Below, we answer questions you may have about targeted communications.
Why do targeted communications encourage greater engagement? Different groups of employees often have different retirement planning needs. When a retirement plan communication is tailored toward a specific group, that message becomes more relevant. For example, younger employees may be more interested in a message about the importance of getting an early start on saving and the power of compounding than older employees who are getting close to retirement age.
How should employees be segmented? It really depends on the demographics of your work force. Grouping employees by life stages is a relatively common approach. But other criteria, such as income or educational level, also may be useful.
In addition to demographics, you may want to look at retirement plan behaviors of your employees. For example, messages can be targeted toward employees who do not participate in the plan, employees who do not contribute enough to receive the full employer matching contribution, employees who do not increase their contributions over time, and employees who take frequent loans from the plan.
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