By random circumstance I’ve had three of the most boring HRish types of conversations in the past month about 401K! Can you imagine me talking about 401K? It’s so, well, it just regular old HR talk! One conversation was with our banking partner (Shoutout to PNC, 33 year business relationship with them and I value that greatly!), two others with trench HR peers, but all three conversations were about the exact same thing — Auto Enrolling employees into 401K.
This is actually a really polarizing topic in HR, I’ve found! It comes down to two schools of thought:
1. HR Pros who believe auto enrolling is helping their employees
2. HR Pros who believe they are infringing on the privacy of their employees by auto enrolling their employees
I’m in camp #1! In fact, I’ll go on record in saying that auto enrolling your employees into 401K is the single greatest gift you can give to your employees over their career with your company. Bam! I said it.
Let me give you a few facts about employees:
1. The majority of your employees that are under 30 have no idea they should be saving for retirement – when it’s the most important time to do so.
2. The majority of your employees at any age – don’t save enough for retirement.
3. The majority of your employees think a magical fairy will come along at age 65 and pay for them to live the next 25-30 years.
These are all actually true!
Most people don’t think about retirement and the amount of money it will take to retire until they get to be around 50. At that point, it’s too late and they are then on a path to be a senior citizen greeter at Walmart. HR can change all of this. HR can ensure that when your employees get to be around retirement age, at least they might have some hope of sitting around enjoying not working! It’s easy. It’s called Auto Enroll – check it out.
If it’s so good why aren’t all companies doing this?
It’s America, right? We hate being forced to do anything. What!? You mean your going to force me to sign up for 401K and save for my future! How dare you! This isn’t Russia!
Want to take 401K Auto Enrollment one great step further!? Auto Enroll your employees and have 3% taken out of their pay automatically as well. Just auto enrolling really does nothing but making it easy for people to start saving, but you can actually auto enroll and start them out with an automatic deduction of your choosing. The employee at anytime can choose not to participate and stop the deduction, but very, very few ever will!
Can you imagine the difference you could make in your employees life by
forcing helping them start saving for retirement? For many of your employees, it would be the best thing HR ever did for them, period.