Companies offering a 401(k) matching contribution are providing an important employee benefit — basically free money for employees. Unfortunately, communicating about employer 401(k) plan matching contributions can easily get put on the back burner. Initiatives that require employee action — like benefits open enrollment or wellness programs where employees can earn credits or cash for participation — can eat up a communicator’s time and budget.
However, making sure employees are well-informed about 401(k) employer matching contributions can:
- Reduce the number of questions about retirement account contributions
- Increase 401(k) participation levels and, most importantly,
- Help employees prepare for retirement
401(k) match announcement to employees
There are key points where 401(k) communication should take place.
Recruiting.An employer 401(k) match can be a big draw. Be sure candidates know the highlights:
- The company’s 401(k) matching contribution and when it is distributed
- Employee contributions and when they can start
- Employee vesting schedule
Onboarding new hires. Lay the foundation for 401(k) basics at this point. Let employees know if they are automatically enrolled and, if so, at what contribution level. Explain when and where employees can go to change their contribution level. Provide a listing of available investments.
Importantly, let them know about the employer 401(k) matching contribution. Employees get a lot of information as they onboard, so many companies provide a website and/or a printed piece that employees can refer to on an ongoing basis.
Ongoing. Let employees know the company contribution level before distribution. This is especially true if the company contribution level changes each year. Other important times to communicate are when salary increases and bonuses are announced. Some employees may want to change their level of contribution just for any bonuses they receive or after receiving a salary increase.
Periodic communication throughout the year keeps 401(k) accounts on employees’ minds. They are more likely to stay on top of their accounts if occasionally reminded to check their contributions and balances.
An employer 401(k) matching contribution is too good of an employee benefit to keep under wraps. Make sure communicating about it is part of your annual internal communication strategy.
And remember: Keep communication as clear, simple and visual as possible.
If you’d like to talk to about creatively communicating your company’s 401(k) matching contribution, contact us.