5 Ways to Help Carry Momentum From Open Enrollment to Retirement Planning

As employee open enrollment draws to a close, engaging employees around their retirement benefits now can help drive meaningful increases in plan participation and contributions.

The COVID-19 pandemic, current economic turmoil, and trickle-down effects have been a reminder of the importance of benefit plans and programs for employees. Financial insecurities are taking precedence, and 43% of adults have tapped into their retirement savings as a result.¹

At this time of year when employees are actively engaged in many of their employer-provided benefits, there is an opportunity in the post-enrollment period to help them once again shift their focus to the future to best support their goals for retirement. In fact, one study shows that when employers incorporate key aspects of their retirement plan and financial wellness into employee open enrollment communication, 44% more participants enroll in a 401(k) plan, while existing participants double their contributions.²

Building on your communication strategies from employee open enrollment to include financial preparedness and well-being has taken on even greater importance these past few years. Here are five best practices to consider in driving engagement with your employees around their retirement benefits during this important time.

Employees are experiencing unexpected disruption in both their personal and professional lives, and they desire more empathy and attention than ever before. Employees want and expect to be engaged with, on a more personal level.

Consider the materials that can best address employee concerns and feedback, or how communications can recognize the impact of current events, and then point employees to the right financial resources. Employers can also extend support by “being real” with employees, making space for people to feel comfortable asking hard or sensitive questions, potentially offering one-on-one check-ins via phone or video.

An empathetic approach not only proactively acknowledges the challenges the pandemic and inflation has brought, but it also provides unique opportunities for employees to make thoughtful and intentional decisions for the years ahead.

The questions employees have today are not the questions they had last year, nor will they be the same in following years. Again, the need to provide more personalized communications to address employees where they are in their journey or experience is crucial.  Concerns like cost and affordability, for example, will be top of mind right now for many employees, so you may want to address these carefully.

However, other employees will also likely be affected differently from the volatile market and will require different sets of information. Employees may benefit from reminders to continue making contributions and even increase their savings rate. Others may have questions about early withdrawals and penalties. Consider supplementing group communications with personalized communications that help employees understand their unique stake in retirement planning.

In fact, the more relevant and personalized your communications are, the more effective they may be in increasing participation and engagement. One study shows that less than 1 in 10 participants in a plan contribute to their 401(k) at the allowable limit. Employers can take advantage of this information to focus their education content and employee communications with a personalized approach to help bridge this gap in knowledge. ³

With so many employees working remotely, traditional on-site educational methods may be less relevant or effective for many organizations today. Consider replacing conventional channels of communication with more targeted or digital alternatives, such as SMS, workplace chat, prerecorded presentations, conference calls, virtual meetings, or direct mail, which can be particularly helpful for non-desk employees who don’t have a computer or a work email.

If you host virtual meetings, consider planning these sessions like you might an in-person workshop, providing attendees with materials to review ahead of time, offering a clear agenda, leveraging videos or visual slides to teach key concepts, and using interactive options like in-meeting chat to engage attendees and answer questions in real-time.

Education is important in getting employees engaged from the beginning, so it’s crucial for organizations to continually rethink the delivery methods by incorporating new platforms and tools to connect with people remotely and help them gain an understanding of their retirement benefits.

The effects of these ups and downs caused some companies to reevaluate how their employer - sponsored retirement plans are designed. For example, in 2020 during the height of the pandemic, more than 20% of large organizations indicated they were suspending matching contributions, according to a study by the Plan Sponsor Council of America.⁴

Regardless of company size, the impacts of COVID-19 and the current volatile market forced employers to confront an array of complex and sensitive issues around human resource policy, employment, compensation and their overall benefits programs. To help foster a more positive dynamic during an uncertain time, it’s important to be both honest and thorough when communicating any new decisions or changes to company plans.

It may be helpful to explain the changes and why they were made. Consider discussing how this year’s policies may be different from previous years, or how they may change again in the future. The same applies to talking through the trade-offs, if any, of the decisions made. This level of transparency can help dispel employees' confusion or distress, can help them feel more involved in the conversation around their company 401(k) plans, and help set the right expectations from the get-go.

Many employees don’t fully understand all the potential benefits of their retirement plan. According to a poll 88% of U.S. adults think their state should require a semester- or year-long course focused on personal finance education for high school graduation. ⁵ With an overall lack of financial understanding and the inevitable economy ups and downs, it is helpful to repeat and reinforce messages around the importance of creating a retirement savings plan, saving early and often, and focusing on the long-term.

Many participants may have stopped contributing to their retirement plans or are no longer confident about investing. According to one study, 66% of consumers believe their personal financial situation has been negatively impacted by inflation/rising living costs. ⁶ To help build confidence in your offered benefits, timely, relevant, and ongoing communications help employees access information year-round, and encourage them to take the positive steps they need to improve their long-term financial wellness and retirement readiness. Educating employees on market fluctuations and the potential impact on their portfolios, as well as the importance of maintaining a long-term focus instead of reacting to volatility.

During this period of heightened uncertainty, the ability to communicate and engage employees effectively will be important in helping create greater confidence in their present and future. And, for companies, it provides an opportunity to help preserve employee productivity and their bottom line. Building on the engagement from employee open enrollment communication offers a unique opportunity to reinforce the importance of planning for the future.