A recent Harvard Business Review article reported that 80% of all businesses’ employees are feeling financial stress. For 27% of those employees, the stress they feel is reported as “high or overwhelming.” The article goes on to explain that employee financial stress is affecting your profitability. In fact, it describes this stress as “lethal to your bottom line.”¹

One way you can reduce that stress — as well as its impact on your bottom line — is to support worksite employees in their financial planning. Recent stats show that only 56% of US workers are currently participating in a retirement benefits plan.² Of those, another 56% say they are behind in retirement savings, with 37% saying they are “significantly behind.”³

The following are some steps that you, as employers, can take to support your worksite employees in their retirement planning.

Step #1: Implement an opt-out retirement plan

With 78% of Americans reportedly living paycheck to paycheck, many employees will feel contributing to a retirement account is out of their reach.⁴ However, an opt-out retirement plan, which automatically enrolls a new worksite employee unless they request otherwise, can help them test-drive retirement savings to gain a true understanding of its impact.

Opt-out retirement plans typically commit employees to a small monthly contribution, which is usually 3%. However, the ADP TotalSource Retirement Savings Plan (the “Plan”) offers various default automatic enrollment rates other than 3% to better support your worksite employees in building a stronger retirement savings foundation. The Plan also allow employees to withdraw the account balance within 90 days of their first automatic contribution if they find it doesn’t work for them.

The downside of opt-out plans is they typically don’t establish a contribution percentage that will make a big difference over time, with most retirement experts recommending contributing at least 15%.⁵ Opt-out plans can address this shortcoming by complementing the automatic enrollment feature with an automatic deferral increase feature. By increasing the contribution percentage by 1% annually (on the automatic enrollment anniversary date) until it reaches a cap of 15%, you can help participants become better prepared for retirement, improve their financial wellness, and even reduce the risk of outliving their savings. Keep in mind that participants can elect to cancel the automatic increases at any time.

Opt-out plans also have the potential to build excitement for retirement savings by showing your worksite employees how their contributions can expand. This is especially true if the plans experience high performance during the employee’s first few months of involvement.

Step #2: Offer matching contributions

A recent report by the Society for Human Resources Management (SHRM) revealed that 92% of employers match employee contributions to retirement accounts, but that employees often do not take full advantage of the matching available to them. The report goes on to explain that 25% of employees are not contributing in a way that earns the maximum match, with the average employee losing $1,336 per year as a result.⁶

Companies that offer retirement matching can encourage participation by clearly explaining the benefits they offer to employees. The $1,336 annual loss mentioned above, for example, could compound to nearly $43,000 in 20 years according to the SHRM report.⁶ When employees understand how a small increase in their retirement contribution can significantly increase their return over time, they may be more inclined to increase their participation to take full advantage of employer matching.

Step #3: Provide education resources on financial health

Adding financial health resources such as workshops or seminars on financial matters to your company’s employee wellness program is another step that can support retirement planning. This can help your worksite employees understand how earning, budgeting and debt management can contribute to more effective retirement planning.

Are you taking advantage of the Plan’s educational offering?

As an adopting employer, you know providing ongoing financial education to your worksite employees is essential to help them see the value of your benefits offerings, encourage action and inspire them to commit to their savings. Through the Plan, you have access to holistic financial wellness content to engage, educate and enable your worksite employees to gain the confidence needed to take positive actions to see them to and through retirement.

• Traditional educational seminars* – our traditional sessions are 30-60 minutes, presented by our FINRA licensed, bilingual (English/Spanish) Education Specialists⁷ and encourage audience participation.
• Virtual sessions – our shorter presentations run around 30 minutes and are best for virtual meetings to keep your worksite employees engaged. We are always adding fresh content to our library so your worksite employees can take advantage of new learning opportunities.
• On-demand sessions – our on-demand sessions allow your worksite employees the opportunity to learn more, at a time that is most convenient to them.

Visit Voya.com/VoyaLearn today for 24/7 access to live and on-demand sessions. Voya offers a variety of important financial wellness topics that provide your worksite employees actionable steps to achieve the future they envision.

* If you’re interested in hosting an education seminar, please contact your assigned ADP TotalSource 401(k) Specialist at 844-448-0325.

Companies can also consider providing employees with access to retirement advisors in the same way that companies are offering mental health counselors. This assists employees in identifying their retirement goals and understanding the steps they will need to take to achieve them.

Do your participants need assistance with investment decisions?

The following services are provided by Voya Retirement Advisors (VRA)⁸:

• In-plan investment advice – advice focusing on Plan assets, using software powered by Edelman Financial Engines®
• Online Advice – investment advice, educational tools and resources, no additional cost
• Professional Management – phone-based, personalized advice, guidance and ongoing management from investment professionals, fees apply⁹

The financial stress your worksite employees bring to the office has an impact on their effectiveness, but supporting them in their retirement planning can help provide ways to reduce that stress. Every step you take to increase understanding of and participation in retirement plans has the potential to improve your worksite employees’ peace of mind and, subsequently, your company’s overall success.

1. “It’s Time to Prioritize Employees’ Financial Health.” Harvard Business Review, January 2, 2024.

2. “73 percent of civilian workers had access to retirement benefits in 2023.” U.S. Bureau of Labor Statistics, September 29, 2023.

3. “Survey: 56% of Americans feel behind on saving for retirement.” Bankrate, September 27, 2023.

4. “Living Paycheck To Paycheck Statistics 2024.” Forbes, April 2, 2024.

5. “Here’s how much money you should be investing in your 401(k).” CNBC, April 5, 2024.

6. “One in Four Workers Will Miss Out on Full 401(k) Match.” SHRM.

7. Education Specialists are Registered Representatives of, and provide educational seminars through, Voya Financial Advisors, Inc.

8. Advisory Services provided by Voya Retirement Advisors, LLC (VRA). VRA is a member of the Voya Financial (Voya) family of companies. The Advisory Services are provided outside of the Plan and are not endorsed or guaranteed by ADP TotalSource or the Plan. For more information, please read the Voya Retirement Advisors Disclosure Statement, Advisory Services Agreement and your plan’s Fact Sheet. These documents may be viewed online by accessing the advisory services link(s) through your plan’s web site at adptotalsource.voya.com. You may also request these from a VRA Investment Advisor Representative by calling your plan’s information line at (855) 646-7549. Financial Engines Advisors L.L.C. (FEA/Financial Engines) acts as a sub advisor for Voya Retirement Advisors, LLC. Financial Engines Advisors L.L.C. (FEA) is a federally registered investment advisor and wholly owned subsidiary of Edelman Financial Engines, LLC. Neither VRA nor FEA provides tax or legal advice. If you need tax advice, consult your accountant or if you need legal advice consult your lawyer. Future results are not guaranteed by VRA, FEA or any other party and past performance is no guarantee of future results. Financial Engines® is a registered trademark of Edelman Financial Engines, LLC. All other marks are the exclusive property of their respective owners. FEA and Edelman Financial Engines, LLC are not members of the Voya family of companies. ©2022 Edelman Financial Engines, LLC. Used with permission.

9. Fees are about $5 a month for each $10,000 in the account, with discounts for larger balances. That’s based on a program fee of no more than 0.50% of the account balance per year.

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