Why is Your Retirement My Problem?

Steve Gifford Benefits, Communication, Steve Gifford, The FOT Soap Box, Total Rewards

I'm a 401k salesman.

Don't get me wrong, I'm an HR generalist in the truest, small-company sense.  I source dozens of jobs a month, touch a lot of compensation issues, deal with safety, employee relations, and a dozen other things.  But the most common email I send to my employees around the world involves 401k eligibility, and, when I get up in front of a group, 401ks will probably be on the agenda.

So too frequently, my first in-person meeting with an employee includes a discussion of their 401k.  If they're in, they tell me that proudly.  If they're not, they tell me they've been meaning to sign up, and then hit me with questions.  It is the first thing that employees think to discuss when they run into someone “from HR”.

There's a problem with this arrangement.  As an organization, we should provide retirement funding — it's good for our employment brand, attracting talent, and it just “needs” to be part of the compensation package.  Plus, my company is employee owned; profit sharing and a 401k match is fundamentally giving money back to shareholders anyway!

But for any given individual, I really don't care if you're in the 401k.

That will come as a surprise to plenty of my employees.  I talk about 401k's with them a lot, and I think people are under the impression that I get a commission for signing them up.  I've even met employees who resist signing up simply because the plan is company sponsored, and they're suspicious of our ulterior motives.

So, her

e are some 401k facts from the employer's perspective:

  • Whether you sign up or not doesn't make a difference.  We don't make more money or save on costs if you're in, and it doesn't hurt anyone if you're not.  Except, you know, you.
  • There's no real talent driver here.  401k participation correlates to higher retention, but that could just as easily be because the people who aren't going to stay around also aren't going to sign up.  Me signing you up for a 401k doesn't make you perform better, or stay longer.
  • In this day and age, all grown-ups need to have retirement plans.  I shouldn't have to explain this to you, or even explain why putting away only 1% won't help you much either.
  • You and I won't know each other when you want to retire.  So, I won't be around to tell you “I told you so” when you discover that 40 years of not trusting your employer with tax deferred money catch up with you.
  • I kind of hate being defined by retirement plans.  There's nothing measurable there; I didn't recruit someone great, or restructure the organization to be more efficient.  All I'm doing is telling people to do something that, in a more reasonable world, they would do anyway.

This is just publicly venting; I'm going to keep “selling” 401ks.  But employees, please understand that I'm looking out for your interests, not mine.