Innovative and creative approaches to help your company stand out while improving workers’ financial well-being
How can your company stand out from the competition so you can recruit and retain quality talent? At the same time, how do you encourage your workforce to continue saving for retirement when immediate financial needs are pressing?
Innovative and creative approaches such as “fresh starts”, webinars and auto-features may be the answer. This trio may help strengthen recruiting efforts, increase employee loyalty and boost 401(k) savings rates since these initiatives show that your company cares about its workers 'financial well-being. [1]
A “fresh start” is a moment that feels like a new beginning. Therefore, it acts as a catalyst for positive change that motivates individuals to pursue long-term goals and make future-focused choices.[2]
Easy examples of fresh starts include:
More than ever, it’s critical for employers to find effective ways of encouraging employees to save more for retirement. This is especially true because employees are in charge of deciding how much to save; but unfortunately, they often don’t set aside enough to reach their goals.
As such, fresh start framing can serve as a nudge to employees to increase their savings meaningfully. This is significant because prior research indicates that simple nudges, such as suggesting how much to save, can motivate workers to contribute to their retirement accounts at work.[3]
The fresh start research has found that in the eight months following notifications offering employees an opportunity to increase their deferrals, retirement plan contributions improved.[4] In light of these findings, using fresh start framing is a powerful strategy to use in your participant communications that may be an effective way to increase 401(k) deferrals.
As employers continue to navigate the new normal, they are turning to financial wellness initiatives to address employees’ financial stress and retirement preparedness. Beyond improving retention and hiring, employers are committed to moving the needle on employee behaviors, including increasing worker satisfaction and productivity, reducing money-related stress and improving the use of retirement plan benefits.
Recent research has found that financial wellness webinars are effective in helping to accomplish these goals, particularly in increasing 401(k) savings rates. Depending upon the age and contribution level, deferrals rose an estimated $649 to $988 after participants attended a financial wellness webinar on any topic. In addition, attending a budgeting webinar was positively correlated with increased 401(k) contributions.[5]
Automatic plan design features have long been praised for their effectiveness in increasing 401(k) plan participation and savings rates. The two most popular auto features include:
Over the next two years, 28% of plan sponsors are considering enhancing their automatic deferral features, while 23% are considering changes to a plan contribution feature.[6]
Nearly a quarter (22%) of plan sponsors are considering adopting changes to auto-escalation features, while 18% are contemplating enhancements to auto-enrollment.[7]
These findings demonstrate that employers continue to seek ways to support employees retirement savings and are committed to fostering an improved sense of financial well-being in their workforce.[8]
If you are looking to improve financial well-being, plan participation and savings rates for your employees, it may be time to consider leveraging auto features and financial wellness resources. But you don’t have to do it alone. Contact us to learn more about how to use these three fresh ideas to improve retirement readiness at your organization.
[1] Benartzi, Shlomo, et al. “Using Fresh Starts to Nudge Increased Retirement Savings.” Jun. 2021.
[2] Benartzi, Shlomo, et al. “Using Fresh Starts to Nudge Increased Retirement Savings.” Jun. 2021.
[3] Goldin, Jacob, et al. “How Much to Save? Decision Costs and Retirement Plan Participation.” Jul. 2020.
[4] Benartzi, Shlomo, et al. “Using Fresh Starts to Nudge Increased Retirement Savings.” Jun. 2021.
[5] EBRI. “Field of Dreams? Measuring the Impact of Financial Wellbeing Initiatives on 401(k) Plan Utilization.” Mar. 2022.
[6] WTW. “2022: The Next Evolution of DC Plans Survey.” Feb. 2022.
[7] WTW. “2022: The Next Evolution of DC Plans Survey.” Feb. 2022.
[8] WTW. “2022: The Next Evolution of DC Plans Survey.” Feb. 2022.
Privacy Policy | Disclosures | Cookie Preferences | Do Not Sell or Share My Personal Information
Advisory services offered through Allworth Financial, a Registered Investment Advisor | Disclosures | Privacy Policy
Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Check the background of this firm on FINRA's BrokerCheck.
HMRN Insurance Agency, LLC license #0D34087
1 Barron’s 2020 Top 100 RIA Firms. Scott Hanson (2011, 2012, 2013, 2014, 2015 & 2016) and Pat McClain (2012, 2013, 2014, 2015 & 2016). Barron's© magazine is a trademark of Dow Jones L.P. The ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms and the quality of the advisors' practices.
2 Retention Rate Source: Allworth Internal Data, FY 2022
3 The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey.
4 As of 7/1/2024, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $22.5 billion in total assets under management and administration.
5 InvestmentNews 2020 and 2021 Best Places to Work for Financial Advisers. The ranking reflects survey responses and scores completed by both employers and employees. Employers report their organization’s workplace policies, practices, and demographics. Employees complete a survey designed to measure the employee experience.
6 2021 Value of an Advisor Study / Russel Investments
7 Ranked 9th Top Wealth Managers By Growth in Assets in the U.S. from RIA Channel, 2022. RIA Database and RIA Channel are registered trademarks owned by Labworks, LLC.
8 USA Today Best Financial Advisory Firms 2024. The ranking is based on the growth of the companies’ assets under management (AUM) over the short and long term and the number of recommendations they received from clients and peers.
9 NBRI Best in Class Ethics 2023. The Best in Class level is bestowed upon clients performing at or above 90 percentile of the NBRI ClearPath Benchmarking Database.
✢ Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.
✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.
†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.