The average deferral ratio available to owners and/or other Highly Compensated Employees depends on the average deferral ratio of the Non-Highly Compensated Employees. Therefore, businessowners who want to defer the maximum amount possible recognize the importance of strong employee participation in a retirement plan.
Unfortunately, the complex nature of retirement planning and the numerous portfolio options available can be confusing to some employees, many of whom may choose not to make deferral contributions. This can have a negative impact in several ways. Besides jeopardizing their own financial security in retirement, these employees effectively reduce the amount that owners and other highly compensated people can defer. Employee education both in the beginning during the plan enrollment process and on an ongoing basis is an effective way to increase employee participation.
Enrollment meetings provide the perfect opportunity to meet with the businessowner and discuss the plan, thus ensuring it continues to meet the businessowner's needs and retirement plan objectives. In addition, enrollment meetings provide advisers with an opportunity to meet with employees to explain the services they can offer to aid employees with planning for their retirement, individual insurance needs or estate planning. The financial professional's Retirement Plan Wholesaler may also be available to attend and assist with some enrollment meetings.
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