Enrolling in a workplace retirement plan is an important event for many people. The decisions they make will have an impact on their lives today and well into their future. One way you can have a great plan is to offer your employees an excellent enrollment experience.
What is your process right now? Is it anything special, or unique? Have you even given it much thought? Do you give them a packet of information or a link to a website or 800 number? The following is a checklist for an enrollment process which would be better than most:
1) Provide concise information about the plan. This should be made available in either an on-line or printed format. Be smart about the volume of information you provide – most employees will never read a 40 page brochure or review multiple pages of a website. Information would include a description of the plan features, the investments, and additional services that might be available during enrollment. Employees should be given the option to review this information at their convenience prior to enrollment.
2) The enrollment should be completed on-line. Most of the information should be pre-filled for the employee at the plan administration website – the employer uploads the information as a part of the payroll process. Each employee would verify the accuracy of the information. Then they would identify their beneficiaries, indicate the amount they want to contribute, and select their investments. If an employee has limited access to a computer at home or on their own, employers should offer a workstation.
3) Guidance from a human. This is a critical link. Most employees struggle to determine the amount to contribute and the investments that make the most sense for their situation. They are not well equipped to make these determinations. Some have no idea where to start! Professional human guidance can make a difference in a few different ways. An adviser can help each employee assess how their contributions fit into their budget and how to prioritize saving for retirement. They can also provide an educational overview of the asset classes and funds offered by the plan. They can provide this guidance based upon each employees’ experience with investments.
4) Meeting times should be variable. Employees should have the option to receive guidance either during work hours or non-work hours. Some people are fine getting this done at work while others prefer doing this at home or in another setting. This flexibility will enable some to focus better during the process.
5) Guidance should be optional. Some employees are comfortable enrolling on their own. They just need a listing of their investment options and returns and an explanation of how to complete the process. They should not be required to visit with an adviser or a website or watch a video about how to enroll if they can do it themselves.
6) Advisers should not use the enrollment encounter as an opportunity to sell other products and services to the employees. It is common for many retirement plans of smaller employers to be used as a venue for advisers to grow their personal book of business. This is nonsense. Advisers should be justly compensated for their time and effort in supporting the plan, but should not use their interactions with staff to sell other products or services.
7) The encounter should take anywhere from 15 to 45 minutes. While this may vary from person to person, most employees can have a successful enrollment session relatively quickly. A good educational and enrollment session can take 20 to 25 minutes. Some may take longer if they have more detailed questions or issues that need to be addressed.
8) Use enrollment as a starting point. Some of your employees may want more personal guidance down the road, either in the form of additional education or planning. Let them know that the enrollment is just a starting point. You can provide additional personal guidance down the road, when they are ready for it, and when they are not distracted by setting up their account.
What is your process? Is their anything special you do for your staff? How could you make yours better?