Making your small business 401(k) plan work for your employees

Making your small business 401(k) plan work for your employees


You’ve done the research and you’ve seen the statistics. More than 40% of full-time employees do not have access to a 401(k) savings plan [1]. And you’ve made a promise that you and your employees are going to be part of the other 60 percent. You’ve found a plan that you think will work for you, and you’re fired up and counting down the days until you can make that first contribution and “officially” begin your road to retirement. But, does your new 401(k) plan look out for YOU? Here’s how to tell.

What features are beneficial to include in a 401(k) plan?

· Retirement Calculator

It's not just about fund performance and account balances. It's about understanding how much time your money is buying. And that's where a 401(k) service should start—giving you the tools to buy the time you need for your retirement. Think about it like a “years-of-retirement calculator,” always there to give you and your employees a clear picture of how much retirement you’re actually buying.

· Automatic enrollment

Signing up for the plan should be easy for employees. No one wants to have to go out of their way to do something, and auto-enrollment is a simple way to eliminate any psychological barriers that prevent employees from saving. This works because enrolling in the plan is—you guessed it—automatic, and employees who want to opt-out of the plan have to proactively do so.

· Automatic investment

Not sure what to invest in? An automatic investment option defaults people, based on age, into the appropriate risk-based model. It also increases the probability retirement savings goals are reached because most everyday citizens aren’t investment experts, and leaving the choice up to the employee can be confusing and overwhelming. Not to mention, many tend to choose the wrong investment options when the choice is left up to them.

· Automatic alerts

A few 401(k) plan administrators go the extra mile. Automatic alerts, focused on event-based messaging, are sent out to participants to help them stay on track with their savings goals. Turning one year older or receiving a raise in salary may affect the employee’s retirement plan, and participants are reminded by these event-based messages that adjustments to contribution rates may be beneficial. Decisions that affect retirement are monitored, keeping participants in the know on their retirement goals. 

So now that you know a few beneficial features that you can “snap on” to a 401(k) retirement plan, you may be wondering where to begin searching for a retirement plan administrator. There are 401(k) plans out there like PAi’s CoPilot that make it easy for you to understand and work toward your retirement goals.

With CoPilot, you’ll be matched with investments that fit your needs, and they’ll be tracked and monitored for performance. Plus, you'll receive real-time messaging whenever an event occurs that will impact the health of your retirement, so you'll always have a clear picture of what matters most—how many years you can afford to be retired.