Poor 401(k) presentation a turn-off for employees

Most employers do a lousy job of making 401(k) presentations to their workers, according to the Financial Literacy Center, of Kalamazoo, Mich.

And, the center states, that hurts not only the employees, who fail to take full advantage of 401(k)s, but also the employers, who don't get as much credit as they should for offering the benefit of a 401(k) plan.

"It is a myth that 401(k) presentations by definition must be boring, overly technical and drawn-out affairs that either put employees to sleep or cause them to tune out in some other way," said Julyette Jacobs, 401(k) investor education director of the Financial Literacy Center, in a news release.

"Employers who offer 401(k) benefits for their employees often take no steps whatsoever to ensure that employees appreciate the real value of the benefit. And the consequences for employees of not fully utilizing their 401(k) could literally mean the difference between a comfortable retirement and a much more pinched existence in later life," she added.

The Financial Literacy Center has produced a new brochure titled, "Eight Common Mistakes Employers Make in 401(k) Presentations (And How to Avoid Them)."

The classic mistakes employers should avoid in 401(k) presentations, as outlined in the free FLC brochure, are:

1. Talking over the audience's head.

2. Failing to explain how to save more.

3. Placing too much emphasis on "maxing out."

4. Not monitoring the education process.

5. Lumping everyone together.

6. Making the 401(k) presentation too heavy.

7. Treating the 401(k) presentation as "just another talk."

8. Forgetting to "sell" your 401(k) to employees (even after they're enrolled).

The brochure details each of these mistakes and how to avoid them. Copies of the brochure are available free of charge by calling 616-552-4321; writing to "8 Mistakes," Financial Literacy Center, 350 E. Michigan Ave., Suite 301, Kalamazoo, Mich. 49007-3851; or visiting FLC's web site at www.hiffic.com/8mistakes.

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