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Tech-Savvy Millennials Want More Digital Outreach, Match Plans

With Millennials now making up a plurality of the American workforce, a new report from CAPTRUST recommends that retirement plan professionals emphasize digital outreach to expand their business within this increasingly influential demographic.

The report, authored by Brian Perkins, manager of CAPTRUST’s consulting research group, reports that 76% of Millennials, of which 53 million are now in the workforce, view retirement benefits as a factor when deciding whether or not to take a job offer. According to the report, 71% of Millennial respondents to a PLANSPONSOR survey said they found retirement mobile applications to be helpful.

Perkins asserts in the report that Millennials want retirement advice but many lack access to it. He cites a 2014 Transamerica study which said that 61% of Millennials want retirement investment advice, but only 32% of all respondents reported having access to any. That study, Perkins writes, also says that 62% of Millennials’ 401(k) plans use a turnkey asset allocation solution, as further proof that target date funds are continuing an unabated rise in popularity.

“Given this likely trend,” Perkins says of the rise of TDFs, “plan sponsors need to assess the fit between their target date funds, workforce characteristics, and plan design combined with record keeper data about how participants are using them.”

Perkins also recommends that advisors suggest that plan advisors stretch their matching contributions, as Millennials largely respond positively to this. Perkins recommends that plan sponsors halve their current match without decreasing the overall contribution, but only to a certain point.

According to the PLANSPONSOR survey, 60% of respondents were willing to increase their match to 6%, when it was changed to $.50 per dollar up to 6%, instead of being dollar-for-dollar up to 3%. However, just 40% said they would contribute the full match-eligible amount when the employer contribution was changed to $.25 per dollar up to 12% of salary.

Perkins summarizes his report by saying that while Millennials present new challenges for employers with regard to turnover, they present new opportunities as well. The youngest working generation increasingly values “financial security, connectedness, personalization, and professionally managed investment solutions,” he writes, asserting that plan sponsors which tailor their plans with Millennials in mind will benefit both their businesses and their 401(k) plans.

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