Take the money d**mn it

neveradull

I guess I am just venting or hoping for a miracle. About every six months I have a few employees who fail to sign up for our 401K. Our payroll benefits person contacts these employees at least three times and thoroughly explains this employee benefit. When nothing is done she gives the employees names to me as I am one of the trustees. I then contact the employee and again fully explain our 401k plan. I also give them the name of a no-cost financial advisor they can contact. When they again fail to sign up I do the necessary paperwork and their funds go into a low yield money market account. I guess my question would be can you terminate for stupidity? Oh, by the way the employer puts in 6.5% and the employee, although encouraged, does not have to contribute anything.

LivindonSouth

Our plan, or rather our corporate policy, forces enrollment upon signon of employment, first day. You have to opt out, but you are automatically in, otherwise.




Disclaimer: This message is not intended to offend or attack. It is posted as personal opinion. If you find yourself offended or uncomfortable, email me and let me know why.

System

We have a mandatory 401(a) plan where we put 8% into a fixed account for our employees. After conducting hundreds of new employee orientations, I've come to the conclusion that people are overwhelmed with the paperwork, let alone training on 'Right to Know,' 'Sexual Harassment,' 'Drug Testing Policy,' and many, many other things. There are tax forms, group health, dental, life, state registry, employee handbook, job description . . . . Even if they get it all completed, they don't remember or understand it all.

Yes, it's really frustrating for us Sometimes because we understand it and can't imagine that they're getting something so good for 'free' and they won't take the time to filll out the form. Rather than let yourself get upset, maybe fill it out for them and ask them to come in and sign it. I know: we're baby-sitting again. In the war, it's a small concession.

LindaS

I also understand the frustration. What I have found that works best is to have an actual meeting with the EE regarding their 401(k). My process is to provide them with the packet of information (without the actual enrollment form) about one month prior to their being eligible to participate. They are also given a short letter regarding their eligibility as well as what we, the employer, contribute there is also a date and time set for the meeting where we go over the paperwork. This letter also encourges them to seek some financial advice.

As the meeting date approaches I will remind the EE about the upcoming meeting. When the scheduled meeting date/time arrive I bring the EE into my office and sit them down with the enrollment paperwork and explain the process. They are then required to complete the enrollment paperwork. Because we have a match and a contribution they are required to select fund options regardless of whether they are going to contribute or not. If they are not participating the EE typically selects the safest fund option for the money but at least the paperwork is completed.

Not sure if this is something that can be done at your workplace but in the 9+ years I have been doing this this has been the easiest way to get the enrollment work completed on time. I do the same thing for benefits enrollment.

Hope this helps.

KathyHR

When my son became eligible for his 401k this month I practically had to force him to fill out the paperwork because he said he didn't know if he wanted to participate. He's even heard his dad talk about his 401k (same workplace) and me talk about my 403b and how great they are.
He even had plenty of time to sort through the paperwork since he wasn't eligible when he started. His concern was that he wouldn't have enough to live on and I told him that we should probably be charging him room & board (we're still holding out that he'll go to college) so he better put something in, especially since they match 100% up to the limit. 21 yr. olds can be so trying.
Good Luck!

Dutch2

We too have a Contribution as well as a Match. I guess there will always be a few that must be dragged in kicking and screaming to complete the "paperwork" on time. I am meeting with our expert (they live in St. Louis and carry briefcases) Fiduciary Advisors next week to look at setting up an automatic enrollment program with a pre set percent for personal contribution; of course the personal contribuion percentage can be adjusted up or down. The ee's would then have to complete the paperwork to opt out of or to change the personal contribution but not out of the plan.
Good luck...

E Wart

I am not sure if you or venting because employees don't sign up or because they don't seem to care and put their funds in the low yield money market account. Either way, I am with you. I was one of those 'young and foolish" folks at 21 who failed to sign up for 3 years after eligible because it was on another floor. I would consider myself business savy and do save. I have no excuse. However, after more years that I want to admit, I have saved quite a bit through the plans (and even started one at a former employer.) My current plan allows employees to enroll (with me and payroll) but they have to go to Fidelity to set up invetments. I have to nag and nag employees to do this second step. If they don't it is mapped to the money market (which is normal.) I have a couple of good General Managers who sit down with employees and help them through this.
I am so proud of our employees. We have over 95% participation!!
I have found that employees may do better if they talk with someone at their location who isn't in HR and get them to help them with the process. However, you have to make sure those people are trained, don't make promises and suggestions, etc.
Keep nagging. Your employees will thank you one day.
E Wart

TN HR

WOW, EWart! Ninety-five percent participation rate is something that you and your leadership should be proud of!

How'd you do it?

Gene

E Wart

I am a good nag (ask my husband) Especially something that I feel REALLY STRONGLY about.
E Wart

atrimble

We've got 100% participation of employees who are eligible to participate - but of course we mandate participation as a condition of employment. We've run this through attorneys and financial experts and they all say it's legal, though it seems a bit heavy handed to me. So I tell new employees and job applicants that participation is technically voluntary, but if you CHOOSE not to participate, you are also exercising your "at will" rights to terminate or refuse employment. We do have criteria that make ees under 21 ineligible, and the rest of us have to have given six months' service to the agency. Our non-adjustable contributions are 6% employee and 6.5% employer. I've never seen anyone quit or refuse employment because of this mandate.

LivindonSouth

We're at 100% too and so was my previous employer. Here you are eligible on day one and you have to opt out to get out. The other job, you had to have a year of employment and it was voluntary. Maybe it's my suave and convincing demeanor x:-).

Nat

We have a 403(b) and 100% participation. Our company contributes 6% whether the employee participates or not. I too, do not understand why anyone would decline to participate in this wonderful benefit except that we hire lots of young, single people who aren't worried about retirement because they still have 30-40 years to work. We set up meetings for each eligible employee with our broker. If employee misses appointment, I track them down (we only have 130 emps) and say, "I need you to fill out this form to get you enrolled in your retirement benefit. It is FREE MONEY." I don't let them take the form and think about it (you'll never get it back). I get them to sign it right then. That's how we keep 100% participation. I think our broker being able to explain to employees on their level (whatever that is - he is good a finding out their knowledge level about the plan) also helps.

crawfod

We match dollar for dollar up to 3% and overall our workforce participates well, but there are always a few who say they can't afford it right now. I sometimes break it down for them making the point that it's only a few dollars a day that they probably waste on vending machine items anyway. They hang their head, knowing the truth, but still are unable to have the resolve. I do believe it's gotten easier over the years as people realize their future retirement lifestyle depends more and more on their own savings.

neveradull

Thanks everyone. I feel better now, it is somewhat comforting to know that my problem is not unique. I did get a couple of more ideas to try.