Defined Contributions Insights MagazineJuly/August 2008
PSCA Creates Exciting New 401(k) Day Campaign
New member tools include materials for Roth 401(k).
by Kara Schappa
For many plan sponsors, finding the right communication tools that resonate with employees of all ages is a difficult task. Communication techniques that work for one generation may not necessarily generate the same results with a different age group. This year, the Profit Sharing/401k Council of America has created a suite of 401(k) Day tools to help employees communicate the importance of saving for retirement to all of their employees.
Are your employees in their early 20s, where retirement is a million miles away and not exactly on their day-to-day radar? Or, are they more settled in their life and careers and juggling marriage, a mortgage, and college for their kids? Or, are some of your employees hitting the Baby Boomer phase and recognizing that retirement is just around the corner? Maybe the reality they haven’t saved enough just hit home.
401(k) Day 2008 offers help to each demographic group by segmenting campaign materials into three groups with appropriate and creative interactive and print tools that support the needs and questions that employees have while keeping profit sharing and 401(k) plans on their minds.
PSCA’s tools will do just that — keep 401(k) on their minds throughout the year and throughout their career and help them make the best decisions possible to secure their own retirement readiness. These life stages are illustrated through the use of a selection of television shows that appeal to each age demographic, while the remote control logo is used to showcase that they are in control of their retirement planning and can change channels as their needs and opportunities change.
By using a television metaphor, the 401(k) Day 2008 campaigns will provide a positive, everyday connection with life for each demographic group, from Generation Y to Baby Boomers.
What is 401(k) Day?
Created by PSCA, 401(k) Day is an annual celebration spotlighting the importance of employer-sponsored profit sharing and 401(k) plans. As retirement follows work, 401(k) Day officially occurs on the Friday following Labor Day. In 2008, 401(k) Day falls on September 5. However, you can select any day that works best for your company and your employees to host a 401(k) Day of your own and raise awareness about the benefits of saving for retirement by participating in profit sharing and 401(k) plans.
401(k) Day 2008 Tools
From joining early, to rebalancing annually, to an easy retirement calculator, this year’s 401(k) Day covers the subjects your employees need to understand now. The beauty of this campaign is that your employees can self-select and identify the demographic group appropriate for their life. Additionally, you have the opportunity to offer on-going communication throughout the year. By using www.401kday.org, you will find everything you and your employees need just a click away!
Tools for this year’s 401(k) Day campaign include:
· Interactive retirement calculator
· Annual retirement checkup
· An online video: “401(k): A Plan That Pays”
· Easy to understand Saver’s Credit and Catch-Up Contribution Fact Sheets
· Glossary of 401(k) Terms
· Interactive matching and word-find games
· And more!
Tools for All Generations
Generation Y
The “American Dream” was carefully chosen for Generation Y. The important, easy messages of participation are portrayed in a light-hearted, friendly manner to reach out to this audience. The importance of saving early and the simplicity and rewards of saving and investing in your company’s 401(k) plan will keep employees engaged while learning the important lessons of preparing for a secure retirement. These important messages are addressed in articles, online blogs, interactive and print games that teach the language of 401(k), and a complete glossary of common financial terms. Generation Y won’t want to miss the online Web cast, “401(k) — A Plan that Pays.” In fact, everything they need is just a click away!
Generation X
Generation X is sure to relate to 401(k) Day’s “The Symptoms of Not Saving.” These creative visuals can be used to encourage increased saving during the mid-stretch of career, offer information on how to deal with competing expenses like mortgage and college savings, and balancing today’s demands with a secure retirement. Print and online tools are available to provide much-needed direction for this group of employees. In particular, a Web-based tool to calculate how much is needed for retirement provides easy access for setting goals and keeping on track during their career. An easy-to-use Annual Retirement Checkup will assist employees in setting long-term savings and investment goals in your company’s retirement plan. The varied media used to communicate the importance of 401(k) savings to this demographic is sure to be a hit with your employees.
Baby Boomers
“Critical Savings Initiative” is designed especially for Baby Boomers. This concept, so appropriate for today’s Baby Boomers, offers a wide selection of written tools, such as “Understand Your Catch-Up Options,” to promote taking advantage of all plan options available. It also provides planning tools for gap analysis and annual retirement review. This campaign will support your efforts to promote taking advantage of other savings options (Roth 401(k) and catch-up contributions), suggest ways to make up for lost time, and provide ideas for planning for life in retirement with pre-retirement topics of interest to this unique group of employees.
Tools for PSCA Members
As a PSCA member, you have full access to all of PSCA’s 401(k) Day materials. PSCA provides each company with a personal password so you can access valuable training tools at any time, 24-7. Many of these tools are available in both English and Spanish.
New for 2008! Roth 401(k)
This year, PSCA has also created a suite of materials for 401(k) Day that focus on a slightly different, yet increasingly popular, savings option: Roth 401(k). Each year PSCA responds to the requests of our members and the communication challenges they face with their employees. In 2008 many employers are facing challenges with determining if a Roth program is right for their participants and for those that have implemented a Roth already with Roth participation. The challenges require specific, targeted communication tools for employees. PSCA’s 401(k) Day campaign 2008 took this challenge on and created a unique, creative and effective tool for winning results with the Amazing Road to Retirement education tools.
A Roth 401(k) is a 401(k) feature that allows employees to make elective contributions on an after-tax basis. Qualified distributions from these plans, including the Roth contributions and their associated earnings, are distributed tax-free.
These fun and interactive communication tools help your employees learn about the differences between a traditional 401(k) and the Roth 401(k) feature. Using the Amazing Road to Retirement as its theme, an animated e-mail you can download from PSCA’s Web site and send to your employees provides clues about the traditional 401(k) and Roth 401(k) journeys. In the “Meet the Retirement Contenders” section, employees will meet individuals at different stages of their journey to retirement. These hypothetical scenarios illustrate how contributing in a traditional 401(k) or Roth 401(k) can impact retirement savings. Other communications include a poster that provides a comparison of different retirement savings options and an informative article.
Additional Members-Only Tools
PSCA has many other tools for members only. These tools include:
· “Retirement Ready” Web cast designed to provide a basic overview of the many benefits of participating in a 401(k) plan.
· Articles appropriate for each demographic audience are included for plan sponsors to publish in your office newsletters or to hand out during employee meetings.
· Spanish versions of the calculator, annual retirement checkup, interactive games, and many other tools are available for easy use by your Spanish-speaking employees.
· The Amazing Race to Retirement Roth 401(k) education tools, posters, and more. If you have or are thinking about adding a Roth to your benefits lineup, this is one tool you can’t afford to miss.
· New for 2008! 401(k) online blogs, which are abbreviated articles with linked information to important retirement resources and concepts presented by characters from each of the generations “personalizing” the retirement planning experience.
· New in 2008! Pre-written, blast e-mails for plan sponsors to send to their employees at any time, keeping 401(k) on their minds and reminding them of important plan information.
Conclusion
Planning for retirement isn’t about just one day; it is a process that takes time and careful planning. Employees that have access to ongoing education and communication materials that resonate with them and motivate them to take action and responsibility for their own retirement savings will be well-prepared for life after work. 401(k) Day is one way to provide your employees with the tools they need to prepare for retirement.
Kara Schappa is Editor for PSCA
Editor’s Note: 2008 401(k) Day is sponsored by: ADP Retirement Services, Fidelity Investments, The Hartford, Principal Financial Group, The Standard, T. Rowe Price Associates, Inc., and Transamerica Retirement Services. Special thanks to Charles Schwab for the graphic design of employee education materials. Special thanks to Wells Fargo for the graphic design of the Roth 401(k) tools.