Is 401(k) Confusion Keeping Your Employees From Saving?

You offer a 401(k) plan to help employees prepare for retirement and make your business a more attractive place to work. But offering the benefit is only the first step. Do your employees understand it—and know how to get started?

Research from Ascensus found that 60% of surveyed non-participants cited confusion and lack of awareness as barriers to contributing, compared with 23% who cited affordability. Financial pressures still matter, but clearer communication may help employees take that first step.

For employers, that creates an opportunity: help employees understand the value of the retirement benefit you already provide.

The Hidden Cost of Confusion

When employees don’t understand their retirement plan, they can miss valuable opportunities—and your business may not get the full benefit of offering it.

• Missed employer contributions. If your plan offers a match, employees who don’t understand the formula may contribute too little to receive the full amount available.

• An overlooked workplace benefit. Employees may focus on their paycheck without recognizing how your retirement plan contributes to their overall compensation.

• Misunderstandings about enrollment. In a Principal survey released in 2024, 59% of eligible employees who were not contributing to their workplace retirement plan mistakenly believed they were. That highlights why employers should help employees verify their contribution status.

  
  

A retirement plan can provide meaningful value—but employees need to understand how to use it.

Make Retirement Benefits Easier to Understand

A stack of enrollment forms and investment disclosures can leave employees unsure where to begin. Pair those materials with practical guidance that answers their everyday questions:

• How do I enroll?

• How much can I start contributing?

• How does the employer match work, if one is offered?

• Where can I find my investment options?

• How do I confirm that contributions are coming out of my paycheck?

• Who can help when I have questions?

  
  

Plain-language onboarding, short educational sessions, and periodic reminders can make these steps more approachable. Where available, retirement calculators and on-demand educational resources can also help employees connect today’s savings decisions with their future goals.

Give Your HR Team a Clear Starting Point

Start by reviewing your participation rate and identifying where employees get stuck. Are they unsure about eligibility? Confused by the enrollment process? Unaware of the employer match?

Those answers can help you focus your communication where it is needed most. Education won’t eliminate every financial obstacle, but it can help employees make more informed decisions about their benefits.

Help Your Employees Take the Next Step

Is your retirement plan getting the participation—and appreciation—it deserves?

Whether you already offer a 401(k) or are exploring a plan for the first time, I can help you review your options and identify practical ways to make retirement benefits easier for your employees to understand.

Visit www.myrspquote.com to request a retirement plan quote or start a conversation about your existing plan. Share your employee count, whether you currently offer a plan, and your biggest participation or onboarding challenge so we can discuss the next steps for your business.