An Incredibly Simple Step to Higher 401(k) Enrollment
As a 401(k) advisor, the reason I’m so passionate about improving retirement plans for employees is the simple fact that I believe everybody needs to save, and 401(k), 403(b), and 457 plans are, in my opinion, the best financial vehicle to achieve that aim.
The prospect of matching contributions is simply icing on the cake, after the discipline and habits are formed from simply saving a portion of every paycheck.
One thing I’m committed to changing is the boring and unimaginative manner in which most organizations name their retirement plans, because I believe it’s those little things that can set the tone for employee engagement in the retirement planning process, as well as solidifying an organization’s unique culture and identity.
I initiated a contest at our own firm some years back, soliciting input from our entire team about changing our standard, boring 401(k) plan name. I wanted a creative name to reflect what we’re about and our unique culture. Sifting through some incredibly creative entries, we made the decision to go with the MRP “Pay Myself First” Plan.
I love the name, and it describes philosophically why I became a retirement plan advisor, as well as our firm’s mission to provide innovative, creative, and fun employee education that makes a difference.
Why should an employee spend their career “paying” everyone else with little (or nothing) left for themselves?
One of the benefits of sponsoring a defined contribution plan is that it allows employees and plan participants to, in essence, pay themselves first, which makes sense given they’re the ones working to earn a living. I hit this concept hard early in my career still feel like it is a message employee groups need to hear—and repeatedly at that.
Some may be skeptical, arguing that a plan name will have little or no impact on the employee experience in that plan. They’re wrong.
The plan name is the first, and often most important, step in employee retirement planning engagement. It also allows for the organization to be more creative and unique in their approach to helping employees with financial wellness.
I hope that I can eventually look back and see a wide variety of innovative and creative retirement plan names that break the current mold, and know that my passion for some very unorthodox methods actually made a small difference. A number of our clients have given it a shot, and the creative names suggested, as well as the naming process itself, had led to higher engagement, fun team building, and ultimately higher participation rates.
It’s the reason many of us first entered the business—it allowed for an innovative and creative outlet while looking for opportunities to make a difference in the lives of employers and employees.
Unfortunately, as the industry has matured, it’s more predictable, stale and therefore boring than I would have hoped. I’m confident that our clients are thirsty for new ideas and concepts that will improve their overall organizations, not just their retirement plans, and this is a simple idea to help.
Chad J. Larsen is the Retirement Practice Leader at HUB Retirement & Private Wealth, based in Denver, Colorado. With more than 25 years of experience in retirement plan consulting, he partners with plan sponsors to enhance their retirement programs through vendor selection, fiduciary oversight, investment services, and participant education. Prior to joining HUB in 2019, Mr. Larsen was President and CEO of Inter-Mountain Retirement Partners (MRP), which he built into a respected national consulting firm serving over 250 organizations and more than 50,000 employees and individuals. Under his leadership, MRP received multiple industry honors, including being named among Barron’s Top Institutional Consultants, Financial Times’ Top 401 Advisors, and appearing on PLANADVISER’s Top 100 Retirement Plan Advisors lists. Mr. Larsen holds professional credentials including AIF® and PRP®. He is registered as an Investment Adviser Representative and is affiliated with Global Retirement Partners, LLC and LPL Financial.
