Last month our latest research showed that American employees are in a new position to regain control of their finances. They've indicated they're ready to make significant changes to how they manage their finances and we saw opportunity for plan providers to get them more involved in their retirement plans.

There are a lot of ways to motivate employees, but it can be challenging in today's rough economic times. As we promised, here are some tips plan providers can use to capitalize on employees' newfound financial responsibility in a time when securing their retirement is far from mind, but more important than ever.

1. Any match is better than no match. Most people believe the best feature of a 401(k) is an employer's match. Now is a good time to communicate to employees who are lucky to still have a match that this is the time to take advantage of it. Employees who still receive a match in this economy are aware that they're fortunate, but too often their day-to-day finances get in the way. Communicate that now is the most important time to save for retirement – while they still can receive free company money. Plan providers can also help employees and plan sponsors with resources they can use or provide to budget and determine where they can cut their daily expenses in order to save more. Although an employer match is a great benefit, sometimes employees rely too much on the match and don't focus enough on their own savings.
2. Point out the automatic savings feature. Financial planners will usually say the best feature of a 401(k) is actually the automatic payroll deduction because the saver never has the cash in their hands to spend. They can stash savings without ever noticing it's gone. One of the main keys to success is to set things up automatically, so encourage employees to use their payroll deduction savings feature.
3. Focus on the 401(k)'s benefits over an IRA. Since a reduced or suspended match is the new reality for many 401(k) participants, plan providers now more than ever should be focusing on the advantages that the employer-sponsored plan offers over an IRA. Although many employees no longer have the primary incentive of the match, they can still benefit from a typically lower institutional fee structure, higher contribution limits, and the convenience of pre-tax payroll deduction not found in the IRA market.
4. Grasp Opportunity. Plan providers can use employees' rebounded interest in retirement as an opportunity to communicate the importance of staying in the market even during down times. In hindsight, it's easier for employees to see the value in this lesson, but when times are hard and cash is tight, it's hard to justify saving for the future against piling bills. While the message was hard to communicate when employees were seeing their balances shrink, since the market has rebounded from its lows in March it's become a good time to help employees understand not to panic in future down markets.

Employees' financial stress is finally leveling and they are ready to better manage their budgets; budgeting and savings calls to our financial helpline nearly equaled debt calls as employees reigned in their spending and began to improve their money management skills this last quarter. Focusing on fixing their day-to-day finances will lead employees to either better savings or more spending. For plan providers, that means now more than ever they should be communicating plan benefits as the best place for their money and their future.