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401k Plan Sponsor Finds Recipe for Success With Lower-Wage Workers

Running a 401k or 403b plan can be daunting with most administrators just trying to keep their heads above water. A 401k plan sponsor attending a TPSU program held at Loyola University explains some simple steps she took to increasing assets and participation at her 500-employee property management company’s 401k plan.

The HR manager attending TPSU has challenges with lower wage workers who have trouble saving for retirement with many living paycheck to paycheck. Using auto-enrollment at 6% for new employees means that workers don’t miss the money right from the start. She also encourages employees to put a percentage their pay increases into the plan.

Another tactic she is considering is the saver’s tax credit. Depending on their income, workers can get an additional $1,000-$2,000 tax credit if they participate in their employer’s retirement plan. According to a Transamerica survey, less than 25% of these people are even aware of this benefit because it’s not in the IRS 1040EZ Form. Workers earning up to $30,750 in 2016 are eligible; the income for heads of households is $46,125 and $61,500 for married couples which makes up an estimated 70% of workers eligible.

Changing or just reviewing services provided by the plan’s record keeper is another way to potentially improve the DC plan. The HR professional attending TPSU conducted a thorough review of their record keeper when she was first hired and decided to make a switch which resulted in lower fees and better investments. Assets in the plan have risen from $4 million to $10 million and participation is at 80%. Oftentimes, just the exercise of reviewing service providers and advisors can help the company focus on how to improve the plan for employees as well as the company.

When was the last time you conducted a thorough RFP for your vendors?

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Timothy Kelly

Tim Kelly is the Founder of ForexTV. Since its inception in 2003, ForexTV has been a global leader in forex news and has expanded its news coverage to multiple industries. ForexTV is now one of the most recognized brands in global financial news. Mr. Kelly was also the creator and founder of Retirement Intelligence.

Mr. Kelly is an expert in online marketing, search engine optimization, content development and content distribution. He has consulted some of the top brokerages, media companies and financial exchanges on online marketing and content management including: The New York Board of Trade, Chicago Board Options Exchange, International Business Times, Briefing.com, Bloomberg and Bridge Information Systems and 401kTV.

He continues to be a regular market analyst and writer for ForexTV.com. He holds a Series 3 and Series 34 CFTC registration and formerly was a Commodities Trading Advisor (CTA). Tim is also an expert and specialist in Ichimoku technical analysis. He was also a licensed Property & Casualty; Life, Accident & Health Insurance Producer in New York State.

In addition to writing about the financial markets, Mr. Kelly writes extensively about online marketing and content marketing.

Mr. Kelly attended Boston College where he studied English Literature and Economics, and also attended the University of Siena, Italy where he studied studio art.

Mr. Kelly has been a decades-long community volunteer in his hometown of Long Island where he established the community assistance foundation, Kelly's Heroes. He has also been a coach of Youth Lacrosse for over 10 years. Prior to volunteering in youth sports, Mr. Kelly was involved in the Inner City Scholarship program administered by the Archdiocese of New York.

Before creating ForexTV, Mr, Kelly was Sr. VP Global Marketing for Bridge Information Systems, the world’s second largest financial market data vendor. Prior to Bridge, Mr. Kelly was a team leader of Media at Bloomberg Financial Markets, where he created Bloomberg Personal Magazine with an initial circulation of over 7 million copies monthly.
Timothy Kelly
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