OUCH! Fainting was never part of my job description!

How do you determine success?

As a leader this is something I strive for each and every day, success for my business and success for my employees. And better yet success for our Retirement plan…  Hmm that’s a stretch isn’t it? I’d venture to guess most leaders aren’t thinking about that last one when they are already “task saturated”.

You, as plan sponsors and leaders of your businesses have similar goals for success. You want your businesses to thrive, show profits and growth year over year, produce employees that are motivated, engaged, and efficient… you may be focusing so much on the day to day business accomplishments that you often forget to look at the success (or lack thereof) of your retirement plan and how it can impact the day to day business successes.

Let’s talk to Plan Sponsor Pete

Still thinking it’s a stretch?  Let me tell you a story of a recent interaction I had with one of our many plan sponsors we’ll call him Plan Sponsor Pete.

Pete and I met to discuss how our team could help him with Retirement Communication. In the first few minutes I heard Pete tout the plan’s generous 401(k) match program. He then asked how we could make sure his employees take advantage of it; but before we moved on to how we could help him, I needed more information. I asked the following questions, and got the following answers:

With that kind of match, what percentage of your employees are actually taking advantage and enrolling or participating in the plan?

  • 40-50% of eligible employees made contributions to the 401(k) plan last year (OUCH)

Of the 40-50% participating, do you know about what % they are deferring on average?

  • 1-2% of eligible compensation (DOUBLE OUCH) 

Ok… Pete, please tell me that the 1-2% they are investing, is at least diversified to potentially help maximize their returns

  • Oh no… most of them put it in cash (TRIPLE OUCH- I almost fainted at this point) 

He could easily see the concern on my face and finally said, “I’m not as well off as I thought I was am I?”  Pete, you’re not alone; many plan sponsors assume that by making a generous match that it will translate into their employees being ready for retirement. You need to get your employees to think, act, and prepare differently for retirement which means changing their savings behaviors. 

Easier said than done! For many, retirement is so far away that its out of sight out of mind, they’ll save later when they’re making the big bucks, for others its so near that they feel there isn’t enough time left  to save, so they decide to keep working well into their retirement years.

Either of these mindsets can be very detrimental to both your retirement program success and the success of your business.

Here’s the link:

  • What happens when Traditionalist Tom or Baby-Boomer Becky didn’t save enough? They keep working, impacting an orderly exit of your talent causing frustration with your employees that are ready to advance. Not to mention the potential rising healthcare costs to cover our aging workforce.
  • What happens when Gen Y Joe is offered more money (aka big bucks) to go somewhere else? He takes it, along with his experience and knowledge that you paid to impart on him.

Both scenarios impact employee motivation and the overall cost to run a business. Don’t let the success of your retirement plan, impact the success of your business!


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Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392