Your organization’s retirement plan benefit holds a lot more power than meets the eye. Yes, it’s a key player in the benefits lineup and a must-have for nearly all applicants and employees; but it’s also a significant recruiting and retention tool when properly utilized. Not sure how to determine if your retirement plan is being used to its fullest potential? Let’s take a look at several strategies that can bring it there so that you can not only attract talented candidates to your organization but keep them there for years to come.
Don’t let it get stale
Some organizations or fiduciaries view their retirement plan as something they can “set and forget” when first introducing it as a benefit option. Although this strategy is simple, it is not nearly as effective as it could be. Ensuring you keep your retirement plan offering competitive is key to staying up to date in the recruiting landscape and that your current employees don’t begin looking elsewhere for a better option. Your retirement plan should reflect what’s currently going on in the market so that your rates are aligned if not better than other competitors. Some key attributes to a desirable and competitive offering include but are not limited to: immediate eligibility to participate, plan options with lower fees, and offering an employer match or contribution.
Use it to educate
As a fiduciary, it’s also important to view your organization’s retirement plan as an educational tool. By providing employees and participants with educational opportunities to understand the dynamics of your retirement plan offering, it can in turn help them make informed financial decisions. It’s recommended to keep the framework of your program simple, flexible and accessible so that it’s utilized more widely across your organization. Content should be clear, concise and easy to understand so that participants know their investing and contribution options. Implementing regular feedback opportunities such as surveys is also key to ensuring your program is working. The more your employees and participants understand their retirement plan benefits, the more effectively they will use it. A benefit to partnering with an organization like BerganKDV is that our in-house education specialists can take much of the education prep and distribution off your internal team’s plate.
Apply methods to retain
In an effort to stay ahead of your competition, you’ve chosen to add a generous employer contribution. How do you keep the new talent you just attracted to make sure they don’t come in, collect on the employer contribution, and then leave? While there are many things you can do to prevent this from happening, when it comes to the retirement plan, the simplest way to combat talent retention is through a vesting schedule. Vesting schedules can be set up in a number of ways, most often we see a 5-year graded vesting schedule. Each year a participant stays with your organization, they get to keep 20% of the employer contributions that have been contributed on their behalf. After they have been with the organization for 5 years, they will be 100% vested. This is a method that can be applied to help retain talent, especially if your organization is offering a competitive employer contribution. A Vesting schedule is just one of the many plan design tools you are able to use when determining how best to set up your retirement plan for success.
Conclusion
Your organization’s retirement plan offering is a great tool that can help set you apart from other potential employers and keep your employees feeling valued. It is, however, a tool that’s only as good as the effort you put into it, and it’s important to understand that just because your organization offers a retirement plan option, doesn’t mean it’s doing you extra service. By utilizing the strategies above, you can help your retirement plan benefit achieve its highest potential, which will be noticed and appreciated by employees and new talent.
Not sure how your current retirement offering stacks up compared to others? BerganKDV’s Retirement Plan Solutions team offers a complimentary competitive analysis that will show how your plan ranks so you can make adjustments to recruit and retain talent. Check it out here.
The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal, or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.
The views expressed are those of BerganKDV Wealth Management. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investment advisory services and fee-based planning offered through BerganKDV Wealth Management, an SEC Registered Investment
