401(k) Enrollment Process
NancyJ
37 Posts
Just want some feedback on this one....
We started another company, and of course wanted to setup a 401(k) plan for the employees. After a lot of research, proposals, etc., we finally settled on Union Planters. Good plan design, employee support, MorningStar Clear Futures, etc.
Everything's going along swimmingly, until we get to the actual enrollment process. They want the employees to specify on the enrollment form only the contribution percentage they want, not the allocations. They will automatically deposit these contributions into a MM fund UNTIL the employee logs into their website or calls their 1-800 number to then tell them how they want the contributions allocated going forward.
Now, I have never seen this arrangement before. UPB insists that it eliminates key errors on their side, I say it's just another way to cut their workload. IMHO, with 650+ employees in this new company, chances are many of them will forget to log in, or call, or forget the instructions (which they will hear at the enrollment meeting), which will create a huge burden for my poor Benefits Coordinator (yes, that was singular) to stay on top of this.
Anyone else have a setup like this? Am I out of line to argue this point? In my history the employee has always indicated in writing on their enrollment form the contribution percentage AND where they want it to go.
Sorry for the length of the post - I'm a little frazzled!
x:o
We started another company, and of course wanted to setup a 401(k) plan for the employees. After a lot of research, proposals, etc., we finally settled on Union Planters. Good plan design, employee support, MorningStar Clear Futures, etc.
Everything's going along swimmingly, until we get to the actual enrollment process. They want the employees to specify on the enrollment form only the contribution percentage they want, not the allocations. They will automatically deposit these contributions into a MM fund UNTIL the employee logs into their website or calls their 1-800 number to then tell them how they want the contributions allocated going forward.
Now, I have never seen this arrangement before. UPB insists that it eliminates key errors on their side, I say it's just another way to cut their workload. IMHO, with 650+ employees in this new company, chances are many of them will forget to log in, or call, or forget the instructions (which they will hear at the enrollment meeting), which will create a huge burden for my poor Benefits Coordinator (yes, that was singular) to stay on top of this.
Anyone else have a setup like this? Am I out of line to argue this point? In my history the employee has always indicated in writing on their enrollment form the contribution percentage AND where they want it to go.
Sorry for the length of the post - I'm a little frazzled!
x:o
Comments
Did they really have so many keying errors that they felt it necessary to refuse to do the work in order to avoid the errors? Not very good service or approach to problem solving...
Sit back and relax and it will be fine. However, I do encourage you to continue to educate your employees about investments and choices. I hope your company sends our information on this to them.
E Wart
We will continue to have periodic mailers and seminars on investing for anyone who wants to attend, but we can't make it mandatory.
Thanks for the input.
Oh, I forgot to mention that at a couple of our locations I have someone who is really knowledgeable and gung ho the 401(k) and has access to the PC. I suggest that if people need help, they go to see this person. Then I give this person instruction that they ARE NOT TO TELL employe what to invest in, but just help them get to the right screen under their account. So far this has worked well. They are very rarely called upon but there if needed. (Or I can walk the employee through it if need be.)
E Wart
If our employees were required to go online or call an 800 number to allocate their funds, I can honestly say in 85-90% of the cases it just wouldn't happen. The majority of our employees have no knowledge of the computer or just don't know enough about the importance of it all to make that effort. If we had more of an "office" culture like some of the above posters, I can see that scenario working. But NancyJ, if your employees are like ours, I can understand why you would be concerned. That would not fly here, and our employees would be the ones to suffer.
As I am sure you can tell, I LOVE this benefit.
E Wart
Overall, I believe our group is pretty smart (we're a large medical group, so I hope so!), but benefits tend to be forgotten pretty quickly in a busy medical practice.
I'll let you know how it turns out!
It kicks in on 8/1/04..... stay tuned....