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Hefren-Tillotson Case Study: Strengthening Your Company’s 401(k) Plan
A major regional furniture company was experiencing several problems with its 401(k) plan, including a low participation rate. Only 56 percent of eligible employees were participating in the plan, and the average deferral rate was approximately 2 percent. Like many companies, this business created its 401(k) plan as an attractive benefit to protect the long-term financial health of its employees, so these figures were a source of concern and confusion for executive management.
Our Solution
Employees often shy away from 401(k) plans because they don’t have a clear understanding of the plan’s value or find the paperwork intimidating. Hefren-Tillotson Corporate Services designed a targeted employee education campaign that not only helped employees understand the benefits of participating in a company sponsored retirement plan but also provided them with the tools to join the plan, select appropriate investments, or increase the amount they had already been contributing to the plan.
Results
Through these efforts, 56 out of 104 non-participating employees chose to enroll in the plan and 83 out of 155 participating employees chose to increase their contributions to the plan. After just one year of managing the 401(k) plan, Hefren-Tillotson Corporate Services increased the participation rate from 56% to 76%.
For more information:
Hefren-Tillotson Corporate Services is proud of its efforts to help workers in our region become better prepared for retirement. To learn how your organization can boost its 401(k) participation, contact Neil Alexander of Hefren-Tillotson Corporate Services at (412) 434-0990.
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