Top 3 Ways to Educate Your Employees About Their 401(k)

62% of employees look to their employers to help achieve financial security [1]. Unless your employees plan to work forever, they need a way to pay for those work-free retirement years. An informed employer will be able to educate their employees about 401(k) plans without making it too complicated to understand. Here are 3 ways to make saving for retirement as easy as 1-2-3.

1. Keep it Simple

The most important part of employee education is to keep everything as easy to use as possible. Most employees aren’t familiar with the ins-and-outs of retirement saving so if they are intimidated by any aspect, they might not sign up at all. Instead, provide the right amount information so they understand what they get if they sign up, such as an employer match and compounding interest (who doesn’t like FREE money?), and how to start contributing. Streamlining the process usually improves enrollment and you can offer the in-depth information for those who want to learn more.

It is also helpful to know your audience when deciding how to educate. Employees who have regular access to a computer may prefer online features such as webinars and video, while those who aren’t as tech-savvy may need a more hands-on approach such as convenient enrollment meetings and one-on-one appointments with someone to help them set up their whole plan. CoPilot provides both the online options and a customer care team (real people, not robots) to assist at all levels.

2. Be Proactive

Once an employee enrolls, it is beneficial to have an interactive system to keep the employee engaged in their retirement. CoPilot uses a Years of Retirement calculator, which has controls similar to an interactive video game, showing the user how increasing their contribution can buy them more years of retirement. If the employee can see what’s needed in their future and a path to get there, they are more likely to save now.

Saving for retirement can become “out of sight, out of mind” after enrollment. Event-based messaging, like emails on their birthday and employment anniversaries, reminds the employee about their retirement savings plan and provides the opportunity to make immediate changes now or at a future date. Just keep these reminders to a minimum so the emails don’t become annoying.

3. Make Investing Easy

Part of saving for retirement is making the right choices about how to invest money and when to change the strategy. Managed model portfolios simplify investment options with default age groups. A younger employee is put into a more aggressive model and, as the person ages, the model becomes more conservative. For employees who are investment savvy or wish to make their own decisions, the CoPilot retirement service allows them to pick from individual investments or the same managed model portfolio options.

If all else fails, do it for them.

Sometimes it doesn’t matter how much education and opportunity employees are given, they’ll never make the effort to enroll. By having automatic enrollment and automatic escalation as part of your 401(k) plan, the effort on the employee’s side to start saving for retirement is reduced to nearly zero. They are automatically enrolled in the plan unless they make the effort to opt-out, and their contributions will automatically go up each year, reaching a predetermined cap, unless they make the effort to go in and change it. Automation gives your employees more time to focus on achieving financial security with the 401(k) education you provide.

Want to offer your employees a retirement savings plan that’s easy to use? CoPilot Retirement Services can show them how many years of retirement their money will buy, not just how much money they’ve saved. Contact us online or give us a call to get your 401(k) plan started: 800.236.7400.


1         Metlife Employee Benefit Study, 2015

Nicholas Crary, CPFA - Financial Services Representative - - 800-236-7400 x3381

Nick is a subject matter expert on 401(k), retirement savings, participant advice, small business 401(k), investments, education on options.