5 Easy Ways to Streamline 401(k) Plan Enrollment

Author: / 19 Apr 2023 / 401(k) Plan Information, Small Business 401k

Illustration: Employee Enrollment Presentation for Plans with Auto Enrollment (plans not managed by TPA)

Congratulations! You’ve picked the perfect 401(k) plan for your small business. Now what? It’s time to get your employees saving!

One of the best things you can do is make sure the enrollment process is simple, clear and streamlined.

Common Enrollment Challenges

Encouraging employees to enroll in your small business 401(k) plan can be a daunting task. Some common challenges include understanding the enrollment process, selecting investment options, and deciding on a contribution amount–not to mention the paperwork and deadlines.

Streamlining the Enrollment Process

To make the enrollment process more manageable for your employees, there five top steps you can take:

1. Automate the Process

Choose automatic enrollment as a feature of your plan, admit new participants into the plan as soon as they are eligible to participate. Instead of the traditional method of waiting for the participant to meet eligibility requirements and then enrolling manually (or not – many eligible employees procrastinate or forget), this lets employers add new eligible participants quickly and easily.

You can also choose automatic escalation, a retirement plan feature that enables employees’ contributions to automatically increase by a pre-determined amount or percentage at set intervals (such as annually) until the maximum contribution rate is reached.

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2. Simplify the Language

Use clear, straightforward language that employees can easily understand, avoiding technical jargon or complex financial terms. Refer to our glossary for any finance lingo that’s unfamiliar — and share it with your employees, too.

3. Provide Clear Instructions

Enrolling in your small business’s 401(k) plan should have concise directions, including step-by-step instructions on how to access the enrollment portal, select investment options, and determine the right contribution amount.

4. Offer Incentives

Consider offering incentives to employees who enroll in the 401(k) plan, such as matching contributions or other financial rewards. This can help motivate employees to enroll and contribute to the plan.

5. Communicate the Benefits

Make sure your employees know the value of a 401(k) plan. We recommend in-person meetings, educational materials, and even email newsletters. Ensure your small business’s employees understand the importance of saving (including the benefits of compound interest). And feel free to share the Ubiquity blog with them as many of the articles cover topics of interest to individual savers!

Take the next step – Let me help you.

Contact Jay Jacob, Sr. Retirement Plan Consultant

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San Francisco, CA 94104

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© 2023 Ubiquity Retirement + Savings
Privacy Policy
44 Montgomery Street, Suite 300
San Francisco, CA 94104