Developing Successful Participant Education Strategies

Jun 10, 2021

Plan design features that turn employees’ inaction into positive savings behavior, like automatic enrollment and automatic escalation, can increase a plan’s participation and contribution metrics. But employees who understand the importance of their employer’s retirement plan benefits and who are actively engaged in saving for retirement will improve their odds of meeting their retirement income goals. 

An effective plan participant education strategy can also help workers make informed financial decisions in other areas of their financial lives. Employers who provide financial wellness education on topics such as the importance of diversification and how to balance retirement savings with competing financial needs (e.g., credit cards, student loans) can positively affect their employees’ financial behaviors in many aspects of their lives. 

As an advisor, you can help your clients:

  • Assess the education needs of their employees
  • Develop a custom education strategy that will help the employer achieve their objectives for their retirement plan and their employees’ retirement readiness

Assess Employee Education Needs

The first step in assessing the education needs for a particular workforce is to assess how employees are using the retirement plan today. For example, what percentage of employees are participating in the 401(k) plan and how much are they saving? Are employees diversifying their investments or are assets concentrated in the default investment option? You can help employers compile a list of plan metrics to gauge how the plan is currently being used and set a starting point for measuring change in the future. 

Examples of plan metrics to review:

  • Participation rate
  • Average deferral rate
  • Percentage of auto-enrolled employees
  • Percentage of employees receiving the maximum employer matching contribution
  • Average plan balance
  • Average participation rate in each age bracket (e.g., 20s, 30s, 40s, 50s, 60s)
  • Percentage of employees invested in the plan’s qualified default investment alternative (QDIA)
  • Asset allocations plan wide
  • Percentage of employees with appropriate diversification by age
  • Percentage of employees on track to achieve meaningful account balance at retirement
  • Percentage of employees with loans, with hardship distributions
  • Percentage of employees who cash out at termination vs. request rollovers

With this information, employers can begin to identify areas in which they would like to see improvements. This knowledge will help set the main education objectives. 

Examples of education objectives:

  • Increase participation
  • Raise deferral rates
  • Grow account balances
  • Enhance investment diversification
  • Boost retirement readiness levels
  • Expand use of specific plan features (e.g., Roth contributions, new planning tools)
  • Decrease loans 
  • Lower rate of cashouts in favor of rollovers

Advisors can provide benchmarking data to help employers compare their plan to plans of a similar size. This is helpful not only in setting education objectives but in determining realistic goals. For example, using the plan’s metrics and benchmarking data, employers can set specific, quantifiable targets, such as increasing the participation rate from 65% to 75% or the average deferral rate from 6% to 8%.

Once you and the employer have identified potential education objectives, you can assist the employer in prioritizing the objectives and selecting one or two objectives for the year. To be effective, the education strategy and messaging for each objective should be customized to meet the needs of the specific employee population. This may include related financial wellness topics. For example, some employees may need help fitting retirement savings into their budgets. Others may need to learn about options for paying for higher education and the negative effect plan loans and withdrawals can have on retirement readiness if education is financed with retirement plan assets. Many employees would benefit from help understanding how to balance the amount contributed to their 401(k) account versus contributions to their health savings accounts. 

Determine Format 

Before the COVID-19 pandemic, many employers and employees may have preferred education in a live, on-site group setting because it was a familiar format. But depending on the business and number of employees, training of this type this could be expensive and inconvenient. Now, with the popularity of virtual meetings and digital tools, delivering education can often be accomplished more economically through remote sessions. Virtual meetings can be set up as group or one-on-one meetings, depending on time, budget, and the nature of the topics. Some financial wellness topics and planning tools may also be covered effectively in a pre-recorded on-demand course or video format. Covering multiple topics in these formats can reduce the time commitments on the part of the employer and yourself, yet allow participants to choose topics most meaningful to them, at a convenient time and place. Employers may also want to consider the benefits of providing collateral material in print or email before the meeting to pique interest and to reinforce the material delivered in the courses. 

Using more than one format for retirement plan and financial wellness education can improve the chances of meeting the needs of workers with different learning preferences and abilities.

Create a Schedule

After the education objectives, topics and formats have been identified, advisors and employers can create an education schedule for the year. Depending on the format of the education and the resources needed to produce and deliver the training, this could be a quarterly initiative. Employers may also want to consider whether the education should coincide with certain business-related events such as annual pay increases, open enrollment periods, or scheduled town hall meetings.   

Contact your Newport representative for more information on our participant engagement initiatives and Financial Wellness resources.

Newport Group, Inc. and its affiliates provide recordkeeping, plan administration, trust and custody, consulting, fiduciary consulting, insurance and brokerage services.


Copyright © 2015-2023 Newport Group, Inc.  All rights reserved.
Unauthorized access is prohibited. This site is designed for U.S. residents only.

Newport Group, Inc. (“NGI”), an Ascensus Company, and its affiliates provide recordkeeping, plan administration, trust and custody, consulting, fiduciary consulting, insurance and brokerage services.

Securities are offered through Ascensus Broker Dealer Services, LLC (“ABDS”), member FINRA/SIPC. Securities in California are offered under the d/b/a Ascensus Corporate Insurance Solutions. Other insurance products may be offered by NGI. For more information, please visit -

Investment Advisory and fiduciary consulting services are offered through Newport Group Consulting, LLC, an SEC registered investment adviser and subsidiary of NGI. For more information about Newport Group Consulting and its services, please visit or refer to our Form ADV Part 2, which is available by contacting us at 407-333-2905 or

Newport Trust Company is a New Hampshire state-chartered trust company and wholly owned subsidiary of NGI. Newport Trust Company provides independent fiduciary and trustee services for employee benefit plans.

The views expressed herein are those of NGI and are current only through the date indicated. These views are subject to change at any time based upon market or other conditions, and NGI disclaims any responsibility to revise these materials to reflect updated views. These views may not be relied upon as investment advice and, because investment decisions for NGI are based on many factors, may not be relied upon as an indication of trading intent.