Here are a few tips to help employers ease workers' concerns about their 401(k) balances in light of the recent mood swings of the stock market.
1. Don't give employees financial advice. Employers can give workers the resources they need to make decisions, but don't give advice on selecting stocks and where to invest money.
2. Educate employees on their options. Let workers know that there are restrictions and penalties for early withdrawals on a 401(k) account. Employees need to be educated on the mechanics of their plan.
3. Bring in investment advisors to meet with employees. Companies should enlist their plan vendor to work with employees on their individual investment strategies
4. Help employees avoid looking at their 401(k) performance every day. Employers need to reinforce to employees that a 401(k) is a long-term investment and help them understand they are investing for retirement.
5. Release a benefits statement to all your employees. Employees often underestimate the value in their hidden paycheck.
6. Reassure employees that their money is safeguarded. Employers should make sure their employees know their 401(k) is audited and heavily regulated by the Department of Labor and the Internal Revenue Service. Employees need to be reassured the money they are investing is segregated from the company's general operating funds.
Source: EBN Industry InBrief