It’s approaching — July 1 is an entry date for new enrollments into most retirement plans. Although most participants will just rubber stamp their participation, some will take the opportunity to use all the tools available (through the various vendors available today) and ask the important questions. How do we get more participants to take that active stance in the planning for their retirement? Plan sponsors and committees need to engage participants at different levels. You have to continue to try new things and monitor or measure how each worked and then to review and improve the process. There is no silver bullet that will solve every plan sponsor’s education needs, but you need to look at the demographics of your group and try and build an education policy around your employees.

Participants should have ample motivation to make the most of the retirement planning opportunities their employers offer, but the reality is they do not.

Here are some important questions committees and plan sponsors should think about in building their education policy for the rest of the year:

Are participants saving enough today?

The more we get employees to contribute today, the more they will have for tomorrow. Consider ways to get them to take small steps to increase their contributions, even if it is 1% or 2%. While you may not be able to add auto-increase mid-year, you can take the steps to review what participants are contributing. One way is to ensure they are saving enough to earn the full employer matching contribution if it is offered. This can help employees get more savings and amounts to free money that goes directly toward the participant’s retirement account, making a difference over time.

Does the investment mix suit the participant’s goals?

If your participants are like most, they chose the investment mix when they first enrolled and probably have not modified it since. I think committees need to think about the architecture of how they offer investment line-ups and discuss the appropriate mix for participants given the make-up of their employee population.

Are participants on track to meet their income replacement?

This question is harder to address as employees may have multiple retirement accounts. Committees and plan sponsors need to educate the participants on how much money they will need for retirement. Some vendors are even converting the current account balance into a monthly amount. With all the tools available for participants, it is more about engaging them to use these tools that will help drive participants to gain a better understanding of their retirement goals.

Plan sponsors need to continue to engage participants differently in an effort to help participants understand the need to save today. I know most participants would spend the time to plan the next family vacation, but maybe they should think of their retirement as the future vacation they will take.

John Ludwig, ChFC, AIF, CRPS, is a financial adviser with LHD Retirement. Reach him at

This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.

Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.

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