Following the premise that the easier something is to do, the more likely someone is to do it, The Principal announced in January a new way for workers to enroll in their employer-sponsored retirement plan: texting.
"One of the easiest ways to save for retirement is through an employer-sponsored retirement plan, yet the biggest hurdle is simply getting individuals to sign up," Jerry Patterson, senior vice president of retirement income strategy at The Principal, said in a statement. "We know people have good intentions, but while many eligible employees say they are going to take action, many of those same employees don't. By making the process quick and convenient, we're able to battle inertia and get individuals to start saving right away."
Workers can sign up for their retirement plan and set their contribution amount with a text message or by visiting a mobile-friendly website. Investment options can be set either online or by phone.
Also playing on participant behavior, this time individuals' wish to keep up with the Joneses, Putnam is launching a new feature on its 401(k) platform that compares participants to those of their peers based on age, gender and income.
Putnam announced in late January that it was launching the How Do I Compare feature based on the theory that peer pressure might compel participants to up their game if they see their peers are saving more than they are.
Participants can compare their savings rate and projected income replacement to similar participants as well as the top savers in each peer group.
The new feature should be available in all 401(k) plans administered by Putnam over the next few months.
