There isn’t a lot you can do about this, outside of trying to get all of those retail employees to participate. Does your company use auto enrollment? That can help bump the participation levels up.
I have been trying to do this the past year to drum up support to change providers. My organization’s 401k is a joke with obscene fees, terrible fund choices, and representatives who don’t have a clue what they are talking about; somebody’s neighbor or cousin is making a ton of money off our organization. I am shocked because 90% of my employees simply are apathetic, either they don’t understand or don’t care.
Not to take this thread into a socio-economic direction, but that is the issue that my company faces in that “they don’t understand” and don’t want to understand.
With employees through the USA but a large bulk in the high cost NYC, LA and Chicago areas, many of our employees are not USA born citizens, so they are unfamiliar with 401K plans and they do not want to contribute as they send a bulk of their hard earned money to their families in their native countries and also they “don’t trust the gov’t”.
Our HR Dept and/or 401K Administrators tries to educate all the employee each year with information in several different languages, location seminars, etc but with little success, thus the prime reason why we fail the testing each and every year.
And then we are globally owned by a foreign company whose is not willing to increase the company match (due once again, to a lack of understanding of the benefits, I believe) to the Safe Harbor limits (IIRC it’s 4%) as that will cost millions a year.
My organization employees ~400 people, I have ~150 under my direct management alone and 95% are salary. It’s a public organization so most are not high earners (average maybe $40k), but every single employee has at least a 4-year undergrad degree, including my secretary. These are not unintelligent people, but you say “taxes/retirement/investing” and they look at you like you have a third eye. Our HR manager is the only one who is actively on-board with doing some work to change providers and he is very ignorant about the topic as well, but trusts me. It’s sad, can think of very few things I’d be more interested in learning more about than money and how to keep what I earn.
Wait until one of your co-workers figures out that your 401k plan is terrible and sues the plan administrators (likely to be company officers). Maybe that will get their attention.
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We are about 1,000 employees in the US and just switched providers in December. I was a part of the team that led the project that led to the change. It was very interesting, and I think everyone on the team learned something about 401k’s and how they work (and more importantly, how they ‘should’ work). It was a good process, but we never would have been as successful had we not hired a consultant to help us make some decisions. There is way too much information for one of our internal folks to keep abreast of (and do their real job). There is a huge industry out there that makes a hell of a living off of investors, and many of them have no interest in trying to educate the people that pay for their lifestyles. Our plan was not out of control (in my opinion), and we were still able to reduce costs by quite a bit by taking it to market.
We did move to auto enrollment as part of the provider change, but mostly as a way to lessen the burden on our HR folks. We were 90%+ participation prior to the change, so that wasn’t an issue. The debate now is whether to add an auto increase provision as well. Not sure where we’ll go with that, as there are some differing opinions within our group.
Our plan meets the safe harbor requirements (dollar for dollar on the first 4%, immediate vesting) which may be one of the reasons our participation is so high.