Now that 401(k) Day (on September 6) has been celebrated and retirement awareness has been elevated, plan sponsors and advisers need to hunker down and prepare their participants for retirement solutions in the second half of the year – promoting employee participation and offering tools (like annuities) to enhance retirement outcomes.
We spoke to Timothy Pitney, Head of Lifetime Income Default Sales at TIAA, about engaging employees not participating in the company 401(k) and providing participants with more options in retirement that can provide higher income and more guarantees.
Q: What should plan sponsors be preparing their participants for in the second half of the year?
A: The second half of the year typically means Open Enrollment for most organizations. For the employer, this is the perfect time to highlight the benefits of saving and investing in the organization's retirement plan as people are reviewing all their other benefits. For those employees already participating, it is an opportunity to review how they are using the plan: contribution rate, asset mix, planning for retirement etc. to make sure they are taking full advantage of all features of the plans, especially the match. Most providers have online tools or advice to help with goal setting and tracking progress that employees can leverage.
Recommended For You
Q: What can plan sponsors/employers do to promote employee participation in 401(k) plans?
A: Conventional communication and education methods or even gamification is routinely employed, but often don't have the intended effect. The most impactful way to get people to participate in the plans is to use auto-enrollment. Properly designed, auto-enrollment, auto-increase and using a designated QDIA default can put people on a path to savings that they otherwise may not have achieved if left to their own devices. Leveraging tenants of the Pension Protection Act of 2006, the Plan Sponsor can do all of this under the guise of Safe Harbor protection.
Q: What tools (like annuities) can plan sponsors employ to enhance retirement outcomes?
A: Historically, the 401(k) plan was meant as a supplement to a Defined Benefit Plan but over time, has become the primary source of retirement monies for most private sector employees. As such, the focus has been on accumulating assets with not much thought to decumulation, but that is changing. Not-for-profit 403(b) plans have always been "the" retirement plan and therefore have historically had annuities to help with decumulation and have shown demonstrated success providing guaranteed retirement income. Currently there is a confluence of sorts between 401(k)'s and 403(b)'s in that more plan sponsors are exploring including decumulation strategies into their plan. Diversified income sources through the use of guaranteed fixed annuities, variable annuities and other hybrid approaches provide participants with more options in retirement that can provide higher income and more guarantees, which is what surveys are telling us the participants want.
Related: 401(k) Day: Employer best practices to bolster support for employee retirement planning
Q: How can employers/plan sponsors stress the importance of 401(k) plans for those employees not participating?
A: Plan Sponsors can stress the importance of saving for retirement through plans such as 401 (k)s, but conventional methods have not proven overly effective. Auto-enrollment is the way to go. People can always opt out if they want to.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
