Key Features Maximize Efficiency and Benefit Financial Advisors, Plan Sponsors
Flexibility. Service. Peace of Mind.
These attributes are familiar to any financial advisor when running a business, but they also speak directly to the desires of plan sponsors as they consider 401(k) solutions. Sponsors also look to maximize efficiency by alleviating time-consuming administrative tasks, streamlining the flow of data, and minimizing compliance risk.
Advisors and employers know that the importance of a well-run 401(k) plan cannot be underestimated and that it’s one of the top benefits considered by employees. Consider these data points from a 2018 study by non-profit Transamerica Center Retirement Studies (TCRS)1:
- The vast majority of workers (88 percent) view a 401(k) or similar plan as an important benefit.
- 81 percent of workers agree that retirement benefits offered by a prospective employer will be a major factor in their final decision-making when job hunting.
TCRS also found that the reasons companies offer a plan vary from helping employees to save and prepare for retirement (65 percent) to retaining existing employees (60 percent), offering a competitive employee benefits package (55 percent) and increasing employee job satisfaction (54 percent).
Retirement plan management must be seamless and hassle-free
However, merely offering a retirement plan option isn’t enough. Advisors and companies alike want the management of retirement plans to be seamless and hassle-free – and compatible with other operational systems. They also want online management tools that put control in the hands of human resources administrators and employees to save time and increase efficiency.
For example, employees of leading global IT security company ESET North America say that their easy-to-use 401(k) participant web portal through Paychex allows them to simply select and change funds within a portfolio and offers ongoing monitoring features.
“I feel good about providing a benefit to employees that I can stand behind,” said Megan Lopez, ESET’s Senior HR Generalist.
A multifaceted 401(k) platform also makes it easier to implement features that help increase plan participation, such as auto-enrollment and escalation.
Flexibility and reduced administrative tasks are especially important to smaller businesses like TLF Graphics, a printing company with approximately 125 employees.
“We want everyone enrolled to be able to contribute to their retirement,” said controller Lisa Ives, who easily views newly eligible employees in the Paychex 401(k) website portal.
ESET’s payroll manager Mary Donovan enjoys the 360 payroll integration that Paychex offers and says having a system where “everything that happens in the 401(k) plan just feeds into payroll” is vital. The flow of information at the touch of a button helps reduce administrative time and cost, improve reporting and meet fiduciary obligations.
Companies also cite service as a leading factor in maintaining a 401(k) plan.
“Having a lead person who can answer questions is important,” said Ron LeBlanc, TLF Graphics’ vice president of finance and partner. Collaborating with a retirement plan manager who is quick, responsive, and accurate and who will automatically handle the transactions from payroll to investment strategy for each employee is equally critical. Having representatives who also manage the 401(k) website alleviates what can be an administrative burden to companies and advisors.
ESET’s Donovan agrees, saying that their representatives keep them informed on regulatory issues, which helps them keep the plan in compliance, and provide service at every step — from sign-up to set-up to ongoing plan support.
“A well-rounded and successful 401(k) plan program ensures it is very easy for employees to get involved and contribute,” said Celeste Blodgett, ESET’s vice president of HR and learning development, who noted that they have an 88 percent participation rate.
Study after study reports that if a company offers quality benefits, it can help drive employee satisfaction, which in turn can lead to greater productivity and retention, which is good for your clients’ bottom lines.
Quantitative numbers fuel a less-tangible, but just as important, emotional factor as well.
As a TLF Graphics employee said, “It’s certainly comforting to know that we have an organization in place to support the growth of our 401(k) plans so we can get ourselves to our retirement.”.
One ESET employee put it like this: “They are thinking about me long-term and they are thinking about my future, which makes me want to stay with the company, work hard, and do the best job I can.”
The feeling extends to management as well. According to Blodgett, “It’s an exceptional feeling to know that employees know that we care about them and their retirement.”