In previous episodes of the ‘401k Cowboys’ series, we discussed:
Today, in Episode 52 of The 3 Wins Podcast, Legacy’s Matt Joines and I break down the essential strategies for increasing employee participation in your company's 401k plan. We emphasize the importance of taking a "courageous approach" to plan design and explain why starting with higher contribution rates can lead to better long-term outcomes for participants.
Let’s dive in! 👇
Today’s episode is brought to you by our new book, Collaboration Effect on Profit: Overcoming Founder’s Syndrome to Achieve Sustainable Success—now available on Audible.
Key Takeaways from Episode 52
1. Plan Design Features [00:00:25]
Auto-enrollment and auto-escalation introduction [00:00:37]
Discussion of participant inertia challenges [00:00:57]
Benefits of starting at higher rates (5-10%) [00:03:00]
How participants adjust their budgets to higher rates [00:03:25]
Reminder about opt-out options [00:03:39]
Department of Labor support for auto features [00:04:01]
Discussion of proportional impact across income levels [00:05:02]
2. Matching Contributions [00:08:13]
Safe harbor match example breakdown [00:08:37]
Discussion of 100% return on contributions [00:08:55]
Using match as incentive [00:09:42]
Non-contributory vs. matching comparison [00:10:04]
Discussion of vesting and retention [00:11:15]
Layering in profit sharing options [00:11:37]
3. Communication and Education [00:12:11]
Importance of benefits communication [00:12:11]
Multiple education channels discussion [00:13:24]
Finding the right communication balance [00:13:47]
Available education days from providers [00:14:38]
Cost-effective education solutions [00:15:16]
Record keeper education options [00:16:02]
4. Investment Menu Design [00:17:00]
"Goldilocks" menu concept introduction [00:17:11]
Discussion of analysis paralysis [00:17:28]
Target date funds' role [00:17:48]
QDIA considerations [00:18:14]
Active vs. passive management [00:18:43]
Optimal fund menu size discussion [00:19:25]
Warning about overlapping funds [00:19:44]
5. Financial Wellness [00:20:09]
Importance of goal setting [00:20:09]
Record keeper tools discussion [00:20:45]
Financial planning engagement options [00:21:06]
Executive team considerations [00:21:45]
Impact on employee productivity [00:22:15]
Mobile app accessibility [00:22:26]
Benefits to company and safety [00:23:31]
Financial independence discussion [00:24:00]
About the Hosts
Russ Clemmer: Host of The 3 Wins Podcast and CEO of Legacy Advisory Partners
Matt Joines: Certified Financial Planner
Additional Resources
Check out our new book, Collaboration Effect on Profit: Overcoming Founder’s Syndrome to Achieve Sustainable Success, here: https://legacyadvisorypartners.com/collaboration-effect-book/
Download our FREE whitepaper, “The 3 Wins: How to Unleash the Collaboration Effect on Profit in Your Company,” here: https://legacyadvisorypartners.com/3-wins-framework
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Where to Find The 3 Wins Podcast
YouTube (Legacy Advisory Partners Channel)
The 3 Wins Podcast is brought to you by Legacy Advisory Partners.
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer member FINRA/SIPC. Advisory services through Investment Advisor Representatives of Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Legacy Advisory Partners are not affiliated. Perpetuate Capital is not affiliated with Cambridge or Legacy Advisory Partners.
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