SURVEY SAYS: Have You Made a FICA Inspired Participation Push?

January 6, 2011 ( - This week, I also asked readers if they had/were planning to make any kind of special enrolment/participation “push” related to the FICA withholding changes – and how that had been received. 


A full one-in-five (20.3%) indicated they already have (more on that in a minute), while another 7.8% said they hadn’t done so yet, but were either in the process of doing so, or planned to. 

One-in-ten (10.9%) said they weren’t sure, while 14.1% said they hadn’t done so yet, but might. 

However, 12.5% said that doing so wasn’t likely, and another 15.6% simply said they were not planning on doing anything here. 

The remaining one-in-five opted for “other”, but most of these seemed to fit in the “no” category.  Some had workforces not impacted by the FICA change, others had already put other initiatives in place to spur participation, and others – well, this didn’t appear to be a good time to do so: 

“Everyone in my company had to take a 4% pay cut in October 2010. I think the “savings” will go to replace that loss rather than actually being saved by employees.” 

“I’ll increase my 401(k) contribution myself but won’t make that suggestion to our workforce who’ve had only a 1.5% wage increase in the last 2-1/2 years while health insurance costs have gone up just under 20% during that same timeframe.” 

“…hard to sell when our EE’s are just seeing a significant increase in healthcare contributions…..but “that’s not news.”  


The overall response was quite positive, of course.  I heard from several advisers who had worked with plan sponsors and providers to develop similar communications, and from a couple of providers who had also worked with plan sponsors in developing these programs.   

As for plan sponsors themselves, here’s a sampling of their responses: 

As soon as I read that article I knew I had to pass it on to our employees to make them aware of this opportunity.

Thanks for the idea! I will now be adding similar language to our email blast due to go out early next week.

Wasn't planning to do anything until I read this article! What a great idea. I'll be sending out a similar email in the next few days.

That was a great idea! I sent a similar e-mail and have already received some responses to increase 401k percentages! Thanks

No, but I really like that idea!

I sent an e-mail to our employees regarding using the FICA changes to increase 401k deferrals. Within 5 days, 10% of the participants had increased their deferrals by 2%.

In response to your article about using the SS tax decrease as a means to increase 401(k) deferral by 2%, I’d like to say that I (personally) have done just that as have several of the employees that I work with.  Additionally, I am the plan administrator for our company 401(k) plan, and published a similar article to our employee participants urging them to do the same.  Let’s hope they take advantage of it!

But this week’s Editor’s Choice goes to the reader who said “Thanks, Nevin for including this article in today's Plan Sponsor. I had already initiated this adjustment to my 403(b) and considered crafting a company communication. You've taken the work out of it for me! Now I can devote my entire day to nondiscrimination testing without interruption!”

Thanks to everyone who participated in our survey – and to Jeff Morgan, of Allied Insulation Supply, for setting this conversation in motion!  You can check out the updated version of the idea at