Today’s workforce spans a variety of abilities, skills, experiences and cultural backgrounds that bring exceptional value. It is beneficial to understand and recognize these differences to achieve exceptional results. This remains true when offering, communicating and promoting your company’s retirement plan.
Thankfully, your retirement plan is no stranger to reporting. From participation rates, deferral percentages, asset allocation mixes, benchmarking analysis, investment reviews and other slice and dice metrics, retirement plan information is often shared based on your plan’s specific numbers and peer group comparison.
However, those calculations seldom include the lens of Diversity, Equity and Inclusion (DEI). Now all that is changing.
Expanding the Scope
Nearly two—thirds of plan sponsors have noticed an increased demand for retirement plans to align with DEI efforts. So, now is a good time for employers and retirement plan committee members to revisit and re—evaluate how their 401(k) plans align with the workplace climate.
Four primary areas to review your workplace retirement plan DEI may include:
- Participant cohorts: Participants save and accumulate assets differently. Take a look at your company’s demographics to spot under savers (participation, deferral, asset allocation, etc.). Then implement a targeted strategy to help all groups take advantage of the opportunities offered by your plan.
- Committee composition: To foster a deeper understanding of your employees’ savings experience, reassess and consider expanding the retirement plan committee to include a representative structure that mirrors your workforce, potentially bringing greater insights that enhance retirement savings.
- Investment offering: Consult with us for a review of your investment menu and discuss how a DEI strategy could be reflected throughout your retirement plan’s investment offerings.
- Holistic mindset: For the majority of Americans, the workplace retirement plan is their primary savings and accumulation vehicle for retirement. Employers and committee members should address the current financial state of plan participants to ensure the Financial Wellness.
Diversity can extend not only to different cultural groups but varying generations as well. As such, employers should offer financial education resources that appeal to the different learning preferences (and languages) of each cohort along with best way to communicate with them about retirement, all while working to improve experiences through effective DEI.
As the lifestyles and stages of employees evolve, so do their financial needs and priorities. For a retirement program to be successful, employers should take these changes into consideration.
One size doesn’t fit all. Plan sponsors should seek to employ a mix of communications — utilizing brochures, emails, videos, infographics, blog articles and online calculators — to get the message out to different demographics within the plan.
To get started with your DEI strategy, consider these best practices:
- Know your employees: Seek to understand their differing demographics and assess participant behaviors from multiple perspectives.
- Talk with your service providers: Set up a meeting to learn what resources are readily available (e.g. financial wellness programs, plan data, different language options, etc.).
- Communicate with purpose: Your communications should highlight your retirement plan as a valuable benefit. Help your diverse workforce understand why it is important to save and how your company is helping to promote retirement preparedness.
Using DEI to guide plan decisions can help ensure your company’s retirement plan is working to positively impact the different cohorts of your employees. DEI used wisely can increase the retirement engagement and security of all.
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.
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