Ah, the annual benefits fair! It’s lunch time, and hundreds of employees crowd into a packed room with representatives from health and welfare vendors who are manning tables laden with tchotchkes and brochures. As employees pass by, each vendor seeks to inform and engage.
- “Have you heard about the changes to your health insurance plan?”
- “Have you heard about the supplemental life insurance and legal plan that your company makes available for you on a voluntary basis?”
Ten conversations later, now armed with a bag full of pamphlets, a stress ball, and a new toothbrush, the employee’s head is swimming with information.
It seems only logical to include your retirement plan provider(s) at one of those vendor tables. After all, your 401(k)/403(b) is a benefit. But, I’d like to suggest that it’s not an effective way to promote the plan and may be confusing to employees.
October and November are high-season months for employee benefits fairs due to open enrollment deadlines. A fair can provide one-stop shopping for employees to ask questions about each of the benefits they’re going to spend money on. Employees have a short time frame in which to make decisions, and these decisions cost them money and are locked in for the year. It puts a lot of pressure on employees to choose wisely.
So what’s the problem with including retirement in the mix?
First, presenting a savings vehicle alongside other benefits combines topics related to spending with those involving savings. After all, this is the time of year when employees think about the “hit” to their paycheck from rising health care costs. Why, then, would they be interested in increasing their savings in a retirement plan? They may wish to do just the opposite.
Second, contributing to your retirement plan is not necessarily a once-per-year proposition. For employees not saving at recommended levels, active engagement at different points in the year may be warranted to ensure they’re taking the right steps. That’s the foundation behind our online nudges and our behavior-based campaigns. We believe that employees will appreciate the retirement plan benefit you’ve given them when they’re on track and watching their savings grow.
Third, the questions employees have about their retirement savings may not have quick answers. It’s impossible to answer the very personal question, “Do I have enough for retirement?” when surrounded by crowds of employees in a public space. Typically we have to refer an employee back to our telephone representatives for security and privacy reasons.
Can benefits fairs ever be beneficial for awareness about your retirement plan? Absolutely. We suggest putting a strategy in place to emphasize specific elements of the plan. During open enrollment periods, employees are receptive to such “administrative” tasks as:
- Adding beneficiaries.
- Rolling over plans from previous employers.
- Signing up for access to vanguard.com.
If you can make an internet connection available, any of these discrete tasks can get done in relatively short order.
Generally speaking, however, employees will not be seeking to make critical retirement decisions as they pass a booth. Most questions that are asked can be addressed through online education or behavioral nudges that guide participants to take action in ways that benefit them. Other questions may be best addressed through employee webinars, and still others might require more personalized advice. There is no one size fits all. .
So while there are times when participants are more attuned to their retirement plan’s options, it may not be the same season when they’re deciding what kind of medical insurance to get, how much life insurance to buy, and how much to contribute to a flexible spending account. They probably already have too much on their minds to add retirement to the mix at benefits fair time.
- All investing is subject to risk, including the possible loss of the money you invest.