“Times are tough, and many Americans are struggling to make
ends meet,” Chris Augelli, vice president of product marketing and business
development at ADP Retirement Services, told PLANSPONSOR. “And the list of demands on their financial resources
is long: paying the mortgage, health care expenses, month-to-month bills,
keeping up with rising energy costs, child care and saving for your child’s
education. The list goes on and on.”
As a result of competing financial goals and obligations, a
seemingly distant event such as retirement can often end up at the
bottom of the list.
The second barrier to retirement saving is ineffective communication and education.
Americans understand they need to save more for retirement, but are frequently
unsure how to go about achieving that goal. “Engaging employees in meaningful conversations about their
retirement readiness is critical in spurring them to take the appropriate
actions to improve their personal retirement outcomes, which also achieves the
reciprocal goal of creating more satisfied and productive employees in the
workplace,” Augelli said.
In 2011, ADP commissioned Chatham
Partners to conduct a follow-up study
about employee education, which found
that plan participation increased sharply following an employee education
enrollment meeting. The results indicated on average a 19% boost in
participation rates for plans that held a meeting after moving their 401(k)
program to ADP.