Started in 1996 by the Plan Sponsor Council of America (PSCA), Friday following Labor Day was chosen as the “401(k) and 403(b) Day.” Purpose of this holiday? To encourage retirement savings education and urge businesses and organizations to give their employees information about their 401(k) or 403(b) in a manner that is fun, easy-to-understand.

Most experts agree that a significant portion of the U.S. population will lack the resources to live comfortably after they stop working. This, in turn, will place an increasing burden on the country’s safety net.

So, what can businesses and organizations do? Get their employees to save more. Research shows that when employees are on track financially, they have greater job satisfaction and loyalty to their employer.

Helping employees create a brighter financial future

We can write a full book about how employers can help their most valuable asset be retirement ready, but we won’t do that. We’ll keep this short and sweet.

1. Educate your employees. Encourage employees to begin assessing their retirement needs now. What type of lifestyle do they want to live in retirement, and how much will it take to get there? It’s important that employers remember to speak with their workplace benefits partners about educational content they may have at the ready that can help boost employee engagement. This is where a financial adviser comes handy.

2. Increase employee participation. Shorten or completely eliminate any waiting period for new employees to enter the plan. Remember, you can have different eligibility conditions – so you can have, say, no waiting period (immediate participation) for new hires to contribute to the plan and 1-year of service for any employer matching contributions. Also, allow loans and hardships.

3. Furnish good plan information. Provide plethora of good plan material. Regularly tell your employees about the plan and its benefits to them.

Plan feature changes to consider

Here are some ways to improve your plan and participant outcomes:

1. Automatic enrollment. Auto enroll allows an employer to automatically deduct a specific percentage from an employee’s wages unless the employee makes an election not to contribute or to contribute a different amount. It helps increase plan participation among both rank-and-file employees and owners/managers.

2. Roth after-tax contribution. Most employers offer Roth in their plans. If your plan doesn’t, it’s very easy to add. Roth 401(k) or 403(b) contributions are made with income that’s already been taxed, allowing investments to grow and be withdrawn in retirement without being taxed.

3. Streamline your plan. Go electronic, including enrollment, re-enrollment and withdrawals.

Final words

Like a business or organization, a 401(k) or 403(b) is unique with its own goals and philosophy. In today’s technology driven world, what worked today may not be so viable tomorrow. It’s important that employers review their plans to see what’s working and what’s not working and maneuver accordingly. Need help steering the wheel? NESA – The 401(k) and 403(b) Experts can help. NESA is a high-touch retirement plan provider specializing in plan administration, consultation and government compliance. When you partner with NESA, you gain an “in-house” retirement plan expert.