Get Ready to Handle the 401(k) Enrollment Season Remotely

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Conducting 401(k) enrollment meetings is often a challenge for HR professionals, but the stakes have never been higher than they are in 2020. The coronavirus pandemic will impact both the substance and the form of these meetings. Are you ready?

In terms of substance, the pandemic has created legislative changes, erratic investment markets, and in many cases, reduced earnings for employees and employers alike. These realities need to be addressed as part of the annual 401(k) update. When it comes to the format of enrollment meetings, the pandemic should hasten a gradual transition from in-person to digital sessions that has already been underway in recent years.

While 401(k) enrollment meetings may be especially difficult this year, the HR and benefits team also has an exceptional chance to shine. Going above and beyond to keep employee retirement savings on track under these circumstances can add substantial value to an organization.

An increased emphasis on digital communication may create extra work this year, but it can have long-term benefits if you do it well. Compared to in-person meetings, digital sessions provide more opportunity for quality control and allow you to create reference materials from which employees can learn at their own pace.

Here are eight tips to help you make your digital enrollment meetings as effective as possible:

1. Know Your Audience: How Much Access to Broadband Does Your Workforce Have?

According to the US Census Bureau, 85.1 percent of US households have broadband internet access. On the surface, that sounds promising in terms of your ability to conduct enrollment meetings digitally for the vast majority of your workforce. However, if you break the numbers down a little, it becomes clear that it all depends on the nature of your workforce.

Among households with incomes below $35,000 per year, only 68.3 percent have broadband access. In contrast, 91.8 percent of households with annual incomes of $35,000 or more have broadband access. So, the extent to which you can count on digital enrollment depends very much on what type of workforce you have. You should assess this situation before you start making plans for your enrollment meetings. Perhaps survey your workforce to see who will need to be reached by other means.

2. Use Multichannel Outreach to Encourage Engagement

In addition to getting the content of your digital enrollment sessions right, you must also be sure to use as many communication channels as you can to encourage engagement. For example, send emails in the weeks leading up to the enrollment period to promote the benefits of participation; as the enrollment period arrives, use text messages to remind people to log in and participate. Also use pre-session outreach to solicit areas of interest or concern that your workforce would like to see addressed in your meetings.

3. Lead With What’s in It for Your Employees

There can be a lot of material to cover in enrollment meetings. Resist the temptation to dive straight into the technical and procedural details. Instead, lead with big-picture reminders of what’s in it for employees. Touch on things like your employer match (if applicable), the tax benefits of retirement savings, and the impact early participation has on building wealth. This approach can help motivate employees to pay attention to the details that follow. By focusing on the benefits, you also remind employees that a 401(k) plan is a significant benefit the company is providing.

4. Aim Down the Middle

Part of the challenge of conducting an effective 401(k) enrollment session is gearing communications toward an audience of employees who may vary greatly in terms of education, experience, and interest in investing.

Aim most of your content toward the mainstream knowledge level of your workforce. Making information too basic or too advanced may lose the attention of most of your audience. You can always provide information on how those who need extra help can get it. The most investment-savvy segment of your workforce is likely to research the information they need on their own.

5. Automatic Enrollment and Default Options Are a Starting Point, Not a Finish Line

According to Vanguard, half of all 401(k) plans now provide automatic enrollment, and 71 percent of plans with at least 1,000 participants do so. Vanguard’s data also shows that automatic enrollment has a very positive impact on employee savings rates: The average 401(k) savings rate for plans with automatic enrollment is 10.3 percent, compared to just 6.6 percent for plans with voluntary enrollment.

As helpful as features like automatic enrollment and mapping participants to default options are, enrollment materials should not rest on the assumption that these solutions are the best fit for all employees. Even where automatic features are in place, enrollment sessions should encourage employees to make active choices about the size of their deferrals and where to direct their investments.

6. Create Separate Units for Each Topic

There is a lot to digest in an enrollment session, so break the material up into separate units for each topic — e.g., tax benefits, deferral limits, investment options, setting retirement goals, benefits of long-term savings, etc. This will allow employees to focus on the topics of interest to them. This structure also creates the basis for an online reference library of tutorials your workforce can tap into at any time.

7. Live Q&A Is Awkward Online

A live question-and-answer session is not feasible if you are using prerecorded materials. Even if you’re having live digital sessions, it can be awkward. Not only is sequencing audience participation difficult digitally, but one individual’s question may lose the interest of most of the audience.

Instead, try to solicit questions in advance of the meeting so you can curate them and prepare responses. You may also want to create a FAQ as part of your resources, and give employees a way to submit follow-up questions that you can address later.

8. Give Employees a Checklist to Follow When Making Their Enrollment Decisions

Give employees a checklist of steps they can use to apply the information from your enrollment meeting to each stage of the enrollment process. This checklist should be tailored to match the step-by-step decisions that go into whatever your company’s enrollment process looks like. The checklist should include links that reference recorded sessions on specific topics, as this will help people tap the right information when they’re ready to use it.

This year has certainly been a unique one. However, the techniques you apply to dealing with the challenges of 2020 may end up enhancing your 401(k) enrollment approach for years to come.

Richard Barrington is a senior financial analyst at

By Richard Barrington