Employers who want to help their employees improve retirementsavings are missing out on a big chance to do so: Roth 401(k)s.

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That’s according to consultant Willis Towers Watson, which saidthat employers aren’t educating their employees on the benefits ofRoth 401(k)s—which it says can be one of the most tax-effectiveways for employees to save for retirement.

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Employees can benefit from such accounts for a number ofreasons. Roth 401(k) contributions are made with aftertax dollars,resulting in tax-free withdrawals at retirement. In addition,contributions to a Roth account can provide retirees taxdiversification when they start to draw on pensions, employer-matchcontributions from regular 401(k) plans and other taxable formsof income.

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Read: The DOL fiduciary rule and casual IRAadvice

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Employees aren’t obligated to take minimum distributions fromRoth 401(k) contributions at age 70½, either, unlike regular401(k)s and Social Security—as long as they’re rolled over to aRoth IRA.

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More plan sponsors offer their employeesaccess to Roth 401(k)s, since plan providers and payroll companieshave made them less difficult to administer. A Willis Towers Watsonsurvey found that the percentage of plan sponsors offering a Rothoption has increased from 46 percent in 2012 to 54 percent in2014.

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But employees aren’t using them; less than 10 percent of planparticipants who have the option currently make Roth 401(k)contributions. Why not? According to Willis Towers Watson, a lackof employer-provided education on their benefits isresponsible.

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“Unfortunately, many employers have yet to appreciate and, insome cases, communicate effectively, the full potential of the Rothoption,” Kevin Wagner, a senior retirement consultant at WillisTowers Watson, said in a statement.

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Wagner added, “When employees bypass Roth 401(k) contributions,they unnecessarily narrow their tools for tax-effective retirementsavings. For some, using distributions before age 65 may enablequalification for health care subsidies under the Affordable CareAct. Roth contributions can also help some retirees avoid the taxtorpedo, which can increase a retiree’s marginal tax rate based onthe tax phase-in on certain Social Security benefits.”

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The consultant suggested some actions employers can take tocorrect this. They should communicate the features and benefits ofRoth 401(k) programs clearly and regularly; use an interactiveapproach to reach employees; provide effective retirement-planningmodelers; and put in place a process that monitors employeefinancial well-being on an ongoing basis.

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