Many of today's
businesses are struggling to retain high-quality personnel and have difficulties
recruiting qualified employees to fill vacant positions. One way to entice
potential employees into joining a company and retain current staff is to offer
an attractive 401(k) plan.
A 401(k) plan can
only benefit a company if employees are taking full advantage of the plan. Employers should take a second look at their plan if it is falling short of
expectations and take the appropriate steps to make it more attractive to the
current and potential staff.
A regular review
of a 401(k) plan along with obtaining feedback on a plan from company personnel
will allow an employer to isolate areas within the plan which require
improvement. Here are five areas to examine in deciding if your company's 401(k)
plan is meeting your expectations:
1.
Participation.
What percentage of eligible personnel are
enrolled in the plan? If employees are not participating, do you know why? Some ways to increase participation include offering internet or phone access
to account information, more investment options, and regular mailings of
investment literature.
2.
Employer
Contributions. Are your employer contributions
comparable to what other employers are paying? Employer contributions average
50% of an employee's contribution on the first 6% of pay.
3.
Investment
Options. Does your plan offer several investment
options? Many of today's plans offer 10 to 14 investment options with varying
degrees of investment risk.
4.
Plan
Administrator Services. Is your plan
administrator offering the services the company and its employees need?
Employers and employees want timely and accurate reports and information they
can use to make informed investment decisions. Plan administrators are
providing these and many other services through plan internet access and
regular mailings of investment literature.
5.
Plan
Fees. Do you feel the plan's administration fees
are too high? If so, the company needs to obtain fee information from other
potential administrators and decide if decreased fees for both the employer
and employees warrant a change in plan administrators.
