NEFE TOOLKIT Helps HR Pros Encourage Employee Savings

Americans Struggle to Save for Retirement

Date: October 6, 2011

Contact: Paul Golden 303-224-3514, [email protected]

DENVER—Owning a home surrounded by a white-picket fence and a beautifully-landscaped garden used to define the American Dream. Today, many Americans simply hope they will not be working for the rest of their lives.

Nearly half (47 percent) of U.S. adults aged 18 and older say the top financial goal they wish to achieve during their lifetime is having enough money for/in retirement, according to a survey commissioned by the National Endowment for Financial Education and conducted online in June 2011 by Harris Interactive. But getting there is a struggle for many. The NEFE survey found that 70 percent of American adults say a significant obstacle to achieving the American Dream is their inability to save enough.

With NEFE's toolkit, Retirement TLC, human resource professionals can help employees overcome this barrier by promoting participation in their company's retirement plans.

"Greater participation in retirement savings plans helps ensure a more focused and productive workforce," says Clair Diones, director of marketing for NEFE. "Retirement TLC can help companies of all types and sizes cultivate greater financial stability in their employees."

Overcoming Resistance

HR professionals know that employer-sponsored retirement savings plans are one of the most effective ways for employees to save for, and alleviate worries about, their futures. But encouraging employees to withhold part of their paychecks for retirement is a tough sell, when some employees feel every dollar they earn already has been spent.

"We say, 'Oh it's only $50 a month,'" said a Colorado-based HR manager during a NEFE focus group. "But people need that right now, especially [those from] low-income or single-income homes."

Employee resistance is just one of many obstacles standing in the way of HR professionals charged with promoting retirement plan participation at their companies. Many HR professionals also lack the time and resources to educate employees on their own and must rely on literature from their plan providers, which can be ineffective or unappealing.

"HR professionals have to wear many different hats," says Diones. "Retirement TLC contains all the steps, materials and tools to relieve them from having to start an outreach program from scratch. And because it has been developed by NEFE, they know it is free and noncommercial, so they do not have to worry about conflicts with their current plan providers."

Based on Proven Results

Retirement TLC (Target, Listen, Create) originated from research NEFE funded at Dartmouth College. The study targeted recently hired, low-income and female employees—individuals who were least likely to participate in Dartmouth's employer-sponsored retirement plan. The researchers took what they learned from talking to employees and then developed and tested successful strategies and tactics for increasing participation among these groups, effectively creating a blueprint for NEFE’s new toolkit.

The toolkit encourages HR professionals to pinpoint employee groups that are underrepresented in their company savings plans, an approach that has proven more successful than a one-size-fits-all solution. It then provides HR professionals with ideas and tools for understanding the employee group's concerns and attitudes toward savings plans, using tactics such as focus groups, one-on-one interviews and employee surveys.

Finally, the toolkit contains customizable resources for making retirement plan enrollment easier and more appealing to employees. These include:

  • A guide that breaks down the enrollment process into clear and easy steps

  • A flyer demonstrating the impact of even minimum contributions to a retirement plan

  • Tips for finding extra money for savings

  • "Just Like Me" videos that feature real people talking about their retirement hopes and strategies

The Dartmouth researchers found that HR professionals who gave employees enrollment guides saw new participation in retirement plans increase 21 percent after 30 days, and 44 percent after 60 days. Including the "Just Like Me" videos with the guide boosted election rates 56 percent after 30 days and 26 percent after 60 days. Additionally, researchers noted a 147 percent increase in participation from the year before.

For every step, the toolkit offers approaches of varying intensities, allowing HR professionals to test what works for their companies and employees.

"Just like retirement saving plans themselves, what works at one company might not be right for another," says Diones. "Retirement TLC offers plenty of options, all of which will help HR professionals build their own successful programs."

In addition to Retirement TLC, NEFE offers additional resources that HR professionals can use to encourage employees to take a more active role in their retirement planning:

  • My Retirement Paycheck takes consumers through eight interrelated decision areas that make up their retirement paycheck. Learn more at www.myretirementpaycheck.org.
  • NEFE’s Guidebook to Help Late Savers Prepare for Retirement can help under-saved employees catch up. Download the booklet from www.smartaboutmoney.org/resourcelibrary

About Dartmouth Research

Increasing the Effectiveness of Retirement Savings Programs for Females and Low Income Employees: A Marketing Approach was conducted in 2008 by researchers at Dartmouth College. The study evaluated social marketing as a tool to encourage retirement plan enrollment in 124 employees at Dartmouth College. For more information on this research click here.

Survey Methodology

This survey was conducted online by Harris Interactive on behalf of NEFE from June 28-30, 2011, among 2,257 U.S. adults aged 18 and older. Data were weighted using propensity score weighting to be representative of the total U.S. adult population on the basis of region, age within gender, education, household income, race/ethnicity and propensity to be online. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, click here.

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Contacts

  • Paul Golden

    Media Relations Director

    Direct: 303-224-3514
    Cell: 303-918-3620
    [email protected]

  • Patricia (Pat) Seaman

    Senior Director of Marketing and Communications

    Direct: 303-224-3538
    [email protected]