How to Overcome Common HR Challenges in Your Tribal Organization’s Retirement Plan Pt. 2

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In the first part of this blog, we explained some of the standard HR and benefits challenges your tribal organization can avoid in your retirement plan efforts, including working with a financial advisor and tightening up your retirement loan policy. In part two, we explain how critical education is to the overall success of your plan and participants.

As a plan administrator, you have a fiduciary responsibility to provide adequate retirement plan education. In addition to the compliance risk a lack of education can pose, additional challenges arise when you don’t have a comprehensive education strategy. When overlooked, these challenges can cause issues for your participants and headaches for your HR and benefits team. Let’s discuss how you can improve your plan’s education to serve more people in your organization.

Challenge #1 A Lack of Plan Education Resources

When there is a lack of general plan education, employees will seek out assistance, generally from the HR and benefits team. This can put your team in a difficult position since they can’t offer thorough or professional advice regarding retirement planning. Organizations with successful retirement programs include essential information and guidance in retirement materials and sometimes even provide access to a third-party professional for additional help. When you’re building your retirement plan, education should be a critical step in your rollout. Consider what other resources, reminders, marketing materials, or access participants need to stay on track, enroll on time, and ultimately contribute toward their retirement success. Keep in mind, your education materials may shift depending on the employee’s position and salary.

Challenge #2 No Tracking System

Another common challenge is when tribal organizations have not established a tracking system for their retirement plan education. Perhaps you’ve provided resources to address the first challenge, but you don’t have a metric to measure their effectiveness. One way to measure is by looking at your plan’s participation and contribution rates. If they’re not performing as well as expected, you may consider what parts of your program materials or employee presentations need to be improved or offer more clarity to engage your employees.

Challenge #3 Missing Beneficiary Information

We often see tribal organization retirement plans with missing or partial beneficiary information. Many employees may feel pressured to choose an individual as a beneficiary when asked or may not know pertinent personal information and end up forgetting to designate one at a later time. However, with proper education, employees will better understand the ramifications of not listing a beneficiary. For example, upon their passing, an estate executor may distribute their savings against their desired wishes, or their surviving heirs may be subject to a lengthy and costly probate process. A regular review and additional marketing push around this critical step can also reduce the stress the HR team may experience when facilitating subsequent steps with an appropriate next of kin.

Challenge #4 Low Plan Participation Rate

A low plan participation rate is a clear indication that something is missing from your retirement plan execution. A lack of education, clarity, and resources can leave employees feeling confused or even uninterested in the valuable benefits available to them. We know you care about your employees, and clear and thorough education can help you guide them, with a focus on their retirement well-being and future confidence. Consider how you can engage your employees so they’re more inclined to participate and how you can encourage them to ask questions so you can identify gaps in their understanding.

Challenge #5 Contributions Below the Employer Match

An employer match is a valuable feature every eligible employee should know about in your retirement plan. It is why when we often see contributions lower than the employer match, it’s generally indicative of a lack of plan education. When employees understand the details of their plans and how contributing less than the employer match leaves free money on the table, an increase in contribution rates generally follows. When you see lower contribution elections, evaluate how you can emphasize this feature in your initial and ongoing presentations and marketing.

Many factors contribute to a successful retirement plan, but robust education can address several challenges you and your participants may encounter. Partnering with a specialized professional can help you identify the areas of your education strategy that need improvements, measure your plan’s success, and offer ongoing education resources to participants—in addition to reducing stress and frustration in your HR department. We’ve been helping North American tribes build effective education strategies into retirement plans for over 20 years. Contact us to learn how we can help you promote your plan’s success.