From the course: Helping Your Employees Meet Retirement Goals

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Help your employees change their behaviors

Help your employees change their behaviors

From the course: Helping Your Employees Meet Retirement Goals

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Help your employees change their behaviors

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- So, you've got a great retirement plan with solid options to meet the needs of your employees, fantastic. Now, how do you get them involved? Well, you probably can't force people to participate, so you need to find a way to nudge them towards positive financial behavior, and behavioral economics is the key. Behavioral economics combine psychology with economics to help people change their behavior in a positive way without imposing any significant burdens, prohibitions or penalties. For retirement plans there are a number of behavioral nudges that are proven to get employees enrolled and active with their retirement plans. Most of these revolve around the plan's defaults. By choosing a specific default option it ensures positive action will be taken on an employee's behalf unless they indicate otherwise. These defaults include automatic enrollment of new employees. According to Vanguard, employees and clients with auto-enrollment had a 90% participation rate compared to 63% for…

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