I’ve written a lot about getting the attention of plan participants. I think we can all agree that if we can get their attention, then the likelihood that they’ll be engaged in the retirement plan is much higher. In fact, every quarter when we put out our Top DC Trends and Developments guide, we highlight plan sponsors who have created campaigns or made changes to their plans that have helped increase participation, deferrals, and overall engagement.

I always say that any plan sponsor could replicate these ideas but, admittedly, developing a campaign can take significant time and effort.

Luckily for plan sponsors, the non-profit organization America Saves, which sponsors America Saves Week, provides a pre-built, inexpensive turn-key campaign that sponsors are free to use with participants. America Saves Week is “an annual celebration of saving as well as a call to action for everyday Americans to commit to saving successfully.” The event, which runs from February 27 through March 3 this year, helps participants navigate different areas of their financial lives. Last year, more than 3,100 organizations across the U.S. took part and over $1.14 billion dollars were deposited into new or existing savings accounts during the one-week timeframe.¹

The campaign has a topic for each day, promotional posters, press releases, and other materials – all free, and all available to any plan sponsor who wants to increase engagement with participants. (And who doesn’t want to increase engagement with their participants?)

The topics for each day this year are:

Monday, February 27: Saving Automatically

Tuesday, February 28: Saving for the Unexpected

Wednesday, March 1: Saving for Major Milestones

Thursday, March 2: Paying Down Debt is Saving

Friday, March 3: Saving at Any Age

Looking at the ideas above, someone might ask, “How do we figure out who to focus on for each of these days?” These topics could theoretically be used with every participant – as well as at any time during the year – but if a plan sponsor wanted to take a more focused approach, I’ve provided some ideas below.

Save Automatically: Even though your plan may utilize automatic enrollment, there may be participants who have opted out. Reach out to those who aren’t deferring into the plan or those who have their deferral rate set below the point where they can get the full company match.

Save for the Unexpected: You’ve probably seen the statistic that 32% of Americans can’t cover an unexpected expense of $400 or more.² While this percentage has improved over the years, the still-sizeable portion of Americans who are financially unprepared is a good reminder of how important it is to have an emergency savings account.

For Tuesday, consider focusing on those participants who work hourly or are on the lower end of the wage spectrum. Let them know how important it is to have an emergency savings account set up. This could be a couple hundred dollars or a month or two of expenses. Also, if your plan offers a Roth savings option, I have seen some plan sponsors help participants save for emergencies by putting money into this side of the plan. There may be a premature distribution penalty if they take money out, but that may be a small price to pay in an emergency situation.

Saving for Major Milestones: There are a number of cohorts that you might target for this day, but within the confines of the retirement plan, it may make sense to focus on those participants who are getting closer to retirement. Make sure they know about catch-up contributions and after-tax savings opportunities. Along with that, Social Security is a topic that consistently sees high engagement and plays a significant role in retirement savings.

Paying Down Debt Is Saving: On Thursday, you could engage with those participants who have student loan debt. Consider bringing in a counselor to discuss income-driven student loan repayment options or ways to pay down debt more efficiently. Plus, the sooner these participants are able to pay off debts, the sooner they’ll be able to start saving in the plan.

Saving at Any Age: If you only take part in one day of America Saves Week, this should be the day, because the open-ended theme allows you to engage with each and every participant. Explain how the company match works, provide education on the investments within the plan, and make sure participants know that they can come ask for help if they need it. This is a great opportunity to simply remind participants of the savings opportunities that are available to them and that the company values them.

However you choose to take part in America Saves Week, I believe your efforts – with the help of this useful framework – can help increase engagement among participants. And those efforts and that engagement are key to participant success. In fact, a recent study from Empower showed that, to put it simply, engaged participants are better participants: Their savings rates are 56% higher, they are more likely to take advantage of the company match, they leverage educational materials, and they are more confident about their long-term financial goals and retirement readiness.³

In part two of this series, I’ll look at some recent research that offers insight into how today’s participants may be feeling. Understanding participants’ concerns and aspirations may help you uncover additional ways to engage with them and create targeted campaigns and educational resources for specific groups within your participant population.

 

IMPORTANT INFORMATION

This information is not intended to be legal or fiduciary advice or a full representation of all responsibilities of plan sponsors and financial professionals.

The information contained herein is for educational purposes only and should not be construed as financial, legal or tax advice. Circumstances may change over time so it may be appropriate to evaluate strategy with the assistance of a financial professional. Federal and state laws and regulations are complex and subject to change. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of the information provided. Janus Henderson does not have information related to and does not review or verify particular financial or tax situations, and is not liable for use of, or any position taken in reliance on, such information.