Do your notices get noticed?
Okay, I know this one is a little cheeky, but the answer is “maybe.”
Many plan sponsors approach the retirement plan noticing process as a required chore. Of course, because it’s a compliance expectation enforced by the Department of Labor (DOL), plan sponsors provide notices as required. However, many of them don’t pay attention to what these notices look like or how they’re sending them out. Instead, they take a “check the box” approach.
Plan sponsors who go above and beyond can use the noticing requirements to improve participant understanding of the company’s retirement benefits. Here are a few suggestions.
Jazz up your notice. Most notices don’t get read; in fact, most notices don’t even get opened. This recipient apathy is a result of plan notices being pretty bland. One way plan sponsors can persuade participants to review the notice is by improving the notice’s subject line to entice recipients to open it. By changing the subject line on the email from “401(k) notice” to “Hey everybody, notice the cool change to our retirement plan!” increases the likelihood that participants will review it. Or, adding a memo to the front of a first-class envelope that says, “Please open! New information about your retirement plan is enclosed, and it’s good for you!” will get more people to open the letter. Anyone is much more likely to review the notice if they actually open it first. ☺
Summarize the notice to entice an employee to review it in its entirety. For example, if the plan sponsor takes a minute to include a cover letter with the notice, explaining it and clarifying its purpose, the likelihood of it being read is much higher. An example of a notice summary would be:
“The attached notice informs you of a change to your retirement plan. One of the investment options is changing. Please review the attached notice so you can manage your assets how you would like them. If you have questions or would like to discuss how this notice affects you, contact ____________, and they can assist you specific to your retirement account.”
If you add this explanation (or something like it) as a cover letter, more participants will review the notice details to see how it affects their assets, and they may even contact the support person to get additional help or advice.
Basically, the more information a participant has about the plan and what is happening, the better they feel about it and the more confident they are in their company’s benefits.
Plan sponsors should put in a little extra effort when they distribute notices. They should always take a minute to consider the information from the participant’s point of view rather than merely from a “check the box” perspective.
Please contact us if you’re interested in how Plan Notice can support your company’s efforts vis-à-vis your retirement plan. We provide comprehensive and compliant retirement plan noticing solutions. In addition, when you engage Plan Notice, we ensure compliance and indemnify the plan sponsor of any costs or fees that could be incurred due to improper noticing.
