When I was a synagogue Vice President, I was miffed that the main leadership were relics of the past who insisted it was still 1978 and just having our doors open would get new members. I said the synagogue needed to change its approach as younger families didn’t see the value in paying synagogue dues.
Similarly, plan providers need to understand that just providing 401(k) plan services isn’t enough. They need to connect with millennials because there seems to be a lack of interest for these employees to get involved in a 401(k) plan. Navient’s Money Under 35 study states that 40% of millennials think they can wait on saving for retirement. To me, it shows a lack of connection between retirement plan providers and a growing sector of the audience that 401(k) plans serve. I believe that unless this is fixed, we are going to have a negative outflow when the baby boomers and people from my generation retire because these are the people who are saving in 401(k) plans these days.
Like the Y2K problem, this is a long-term problem that can be solved with more effective communication with millennials about the necessity of retirement savings.