Workforce demographics are changing as more millennials are entering and the baby boomers are retiring. That path to retirement is also changing defined benefit plans are a solution of the past, leaving defined contribution plans as the major retirement vehicle.
Also see: 5 myths about millennials and retirement
The problem is millennials arent contributing enough to their 401(k) plans. There is a crisis, Tim Slavin, senior vice president of defined contribution at Broadridge, said recently between sessions at the SPARK Institutes national conference in Washington, D.C. Millennials better hurry up and get in a 401(k).
So whats the best way to make that happen?
Make it convenient. We live in the concierge society, said Debbie Brown, vice president of marketing at Broadridge.
A good way to disseminate retirement information to millennials is via electronic tools like Dropbox, Slavin said. This way, employees can view statements on their time. Sending alerts in emails doesnt work well, he said, because if not opened immediately, most people forget about them. Its not come to us, but were gonna go to you, he said.
Ensuring tools and communication are easy to understand is key, Brown said. Keep it simple. Make it work everywhere, she said.
Millennials want information upfront before having a face-to-face conversation about retirement, Slavin said. They want to get engaged, he said, and once they are, millennials commit.
Automatic enrollment is a good tool to increase participation among younger workers, Slavin said. Theres significant traction there, he said. The biggest issue is apathy. Thats why auto enrollment should be paired with auto escalation, Slavin said.
For millennials, saving for retirement can be difficult DB plans are no longer supplementing DC plans, wage growth is stagnant and many have student loan debt. Still, achieving retirement goals can be accomplished, Slavin said, but employees need to start contributing to their plan as soon as they enter the workforce.
While younger workers might take some time to realize whats needed to retire, Slavin is confident theyll come around. Millennials are smart, he said. Theyll catch on.
Register or login for access to this item and much more
All Employee Benefit Adviser content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access