Attract Millennials with Values-Based Investment Options

It isn’t surprising that average contributions are generally lower for younger 401(k) plan participants. Not only is retirement much farther down the road for them than it is for their Generation X and baby boomer colleagues, many of them struggle with more debt and less income. On average, they contribute about 5.3% of pay to their retirement plans, compared to 6.6% for Gen Xers and 8.6% for baby boomers.¹

Helping your millennial population save for retirement can start with financial wellness education. Topics like budgeting and debt management are important. But more companies are recognizing that including Socially Responsible Investing (SRI) options in the plan could provide the encouragement this group needs to take to increase their retirement savings.

Of millennial plan participants in a recent survey, 84% would like their investments to reflect their personal values. Seventy percent said they are concerned about the environmental, social and ethical records of the companies in which they invest. In fact, 84% also said they would likely increase their contributions to the retirement plan if they felt confident that their investments were doing good in the world.²

Your plan’s advisor may have suggestions about SRI options you could add to your plan menu. If you decide to do so, be sure to include these options in your communications. Learn more about SRI from Natixis Global Asset Management, here: https://tinyurl.com/NatixisDCSurvey. 

¹Running on Empty: Attitudes and Actions of Defined Contribution Participants,” Natixis Global Asset Management, 2016, page 14, paragraph 2.
²Running on Empty: Attitudes and Actions of Defined Contribution Participants,” Natixis Global Asset Management, 2016, page 10.

Socially responsible investments are subject to the risk that, because social criteria excludes securities of certain issuers for non-financial reasons, investors may forgo some market opportunities available to investments that don’t use these criteria.

For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

© 2018 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues. LPL #1-712969 3/20.