The 401(k) presentation from hell
February 23, 2009 by Bill MeltzerPosted in: Employee education, In this week's e-newsletter, Latest News & Views, Vendor management
Have you ever had an employee education session during open enrollment go wrong?
A What’s New in Benefits & Compensation reader shared a real-life horror story of a 401(k) presentation that may have actually hurt enrollment:
The firm’s 401(k) vendor sent a rep with whom the benefits manager had never previously spoken. The rep who’d done the company’s presentation for many years had recently changed jobs.
To put it politely, the new speaker was not nearly as accessible or well-prepared as the first.
On the day of the session, the rep showed up late, with barely enough time to set up before employees came in for the presentation. To make matters worse, he hadn’t done his homework on the company or its employees.
In the course of about 20 minutes, the rep forgot the company’s name, misstated the employer’s matching contribution rate (the firm offered a 6% match, but the rep told attendees it was 10%), and generally came across as a buffoon.
The company’s benefits manager corrected the speaker about the contribution rate. Rather than smoothing it over by saying something along the lines of “six percent is still quite a generous match” — or even simply apologizing — he tried to make a joke.
He told employees that they ”should marry someone rich” in order to make up the other four percent.
The bad standup comedy act continued, in the form of mime and insults.
“Having a 401(k) means you can sleep soundly at night when you’re ready to retire,” he said, punctuating the point by making a pillow gesture with his hands and placing his head down on his hands.
Employees in the room rolled their eyes.
He then wrapped up his presentation by dramatically pointing his finger at random people in the room.
“What we’d like to see is for you [point], and you [point], and you [point] and EVEN YOU [points at the benefits manager] to get started today, because every year you miss costs you money. Signing up for the 401(k) is the smartest decision we all [waves a pointing finger across the room] can ever make for ourselves and our families.”
The benefits manager cringed. Nothing like asking employees to take time out of workday to have their intelligence insulted — and the generosity of their benefits poked fun at.
Needless to say, the employer wasn’t interested in an encore. The next time around, the company insisted the vendor send a different rep. Thankfully, the would-be comedian no longer worked there by that point and the new rep was polished and professional.
What was the worst experience you’ve ever had in a benefits meeting or presentation at your company?
July 18th, 2008 at 3:35 pm
Thanks for this story. I found it very entertaining!
I work for a well-known 401(k) vendor, and while I don’t do presentations to employees and participants, I do work with the benefits managers. I’ve heard some other horror stories, too, but this one is bad.
I’ll be subscribing to your RSS.
July 24th, 2008 at 1:24 pm
We had requested a bilingual rep since the majority of our workforce spoke Spanish. The guy they sent only knew how to say his last name in Spanish, I had to end up translating almost everything for him making the presentation last twice as long. He knew his stuff and our company, just didn’t know Spanish
July 24th, 2008 at 4:26 pm
It’s really tough getting interest up for 401(k) with such a volatile stock market. Several quarters of negative earnings turn people off.
February 26th, 2009 at 2:44 pm
Years ago we had a rep in from the duck-spokesperson supplemental insurance company… He actually used the phrase “dollars for body parts” to explain the coverage. Lovely.
February 26th, 2009 at 3:00 pm
It is funny this story came up, because something similar happened to me last week! I coordinated the meeting the second week of January so that I knew we would be on the 401k speaker’s calendar before it was taken. I then even told him what I would like reviewed with the staff and then provided meeting times for each group so he wouldn’t be inundated with questions. He was supposed to arrive at 9:00am and at 9:15 sent me an EMAIL and said he was running late…sorry with no ETA provided. I rescheduled everyone (embarrassed) for an hour later and of course apologized. Well once he came he spoke over so many people’s heads (of course I didn’t have the chance to attend since he was late) that one of the manager’s kept clarifying for the group. It was really an awful experience. The worst part of it all is that he plays golf with my boss, so even though I asked him to mention the experience, not much will come of it.
February 26th, 2009 at 3:01 pm
We actually had a rep from our 401k company do a presentation for our employees last week and I think that it really helped the employees to see that yes the stock market is volatile right now but this is not the first time it has happened and it surely will not be the last. That is the nature of the stock market.
It gave the employees a chance to ask questions and truly get a better understanding of how our 401k plan works.
February 26th, 2009 at 3:34 pm
I had a rep recently from the same duck-spokesperson supplemental insurance company use the phrase “dollars for body parts” too. It must be in their training! Geez
February 26th, 2009 at 3:49 pm
We had a similar experience this year. Our company was purchased, so our old 401k plan was discontinued, and our employees were able to join the new corporation’s plan. The 401k rep who arrived to do the informational meetings also arrived late. Generally any time his lips were moving he was giving mis-information (match %, safe harbor %, auto-enrollment, when the old plan would roll into the new plan, etc, etc). As someone else mentioned it was a poor investment of time away from production for our employees to walk away confused and misguided by a very poor example of a stand-up comic.
February 26th, 2009 at 6:33 pm
Mine experience was with an insurance rep, not 401(k). We have annual open enrollment meetings with reps from several companies present. All the reps sit at the front of the room facing their audiance (our employees) and each one gives a presentation. One young female rep sat there texting or talking with one of the male reps the entire time the others were giving their presentation. Unprofessional and rude to say the least, not only to our employees but to the other reps as well.
I informed the company of the problem and told them that should we decide to go with them the next year, we would not allow that individual to do the presentation. I promptly received an apology from the company and the offending rep.
February 27th, 2009 at 6:39 pm
When we switched from a SIMPLE IRA to a 401(k), the rep who did the presentation told outright lies — about the match, the vesting, everything. Because I was also new to the world of 401(k), I didn’t realize they were not true. And she had told me the same lies, anyway, when we signed up. Took me over a year to figure out the real truth — we’re going with a new provider this year!
February 27th, 2009 at 6:40 pm
I had a bad experience with a 401(k) rep also. I had arranged for two presentations and a manager from a separate facility we oversaw was going to listen in with his employees on speakerphone. Ten minutes before the first presentation, I already had the other manager on the line and the rep had not arrived. I called the rep, whom I had only met once before, to get an update and he said he had emailed my boss (who was out on vacation and not checking her email) to let her know he couldn’t make it. With all the employees already assembled, I made a completely unprepared presentation myself.
March 2nd, 2009 at 2:48 pm
My experience was not with the 401 reps, instead it was with another benefit that we had offerd through our company for a several years. We was assigned a new rep, and he also was late for his initial contact meeting with the employees. He did however bring “home-made” cookies for the group to enjoy. However, upon one look at his clothing (covered in some sort of animal hair – not sure if it was cat or dog) no one was interested in his so called tasty treats. He actually stopped his presentation on several occasions insisting that employees help themselves to the cookies, he couldn’t get past his cookies to make a presentation, therefore it turned out to be a completely worthless meeting that wasted all employees time. During the presentation, I contacted the company that he was a representative for, filing a formal complaint.
March 4th, 2009 at 2:09 pm
I was once giving a presesentation in Welch, WV when gunshots broke out. It seems someone was blasting away at ducks in the creek just outside the window. I was frazzled. No one else seemed to notice.
March 5th, 2009 at 4:49 pm
I have a similar story but this one was my fault. At the time I worked for a distribution company. The only time all of our drivers were in the building at the same time was at 4:00 am. So every time I needed to present something to the company I had to always schedule one of the meetings at 4:00 am. We were presenting some new insurance so I made sure we had a rep. available at each meeting for questions. On this day I either forgot to set my alarm or didn’t turn it on or something like that. In addition, I forgot to give the rep. my cell number. So at 3:30 am she was at the hotel waiting for me to pick her up for the meeting. One of the managers finally called me at 4:15 waking me up and asking where I was. I was so embarrassed and felt awful. We rescheduled the meeting for the next morning and the rep. called my cell at 2:30 am to make sure I was up and getting ready. How pathetic, huh?
March 5th, 2009 at 6:05 pm
Good timing!
Our rep will be doing a 401(k) presentation in the next few days. I am forwarding your article to give him a “heads up” on what “not” to do…..
Thanks!
March 6th, 2009 at 3:21 pm
Our 401 K rep is always late for presentations, but the worse rep we had was when we switched companies for our FSA plan. The rep was late, did not have enough materials for everyone (even though we were asked several times how many people were attending), she did not seem to know her information very well. The worse part was when she actually said she bought benadryl for her dog and claimed it was for herself on the form. That’s not only being illprepared – that is fraud! We reported her to her supervisor.
April 2nd, 2009 at 3:04 pm
It must be a company training tip, because our “duck-spokesperson supplemental insurance” company used the phrase “dollars for body parts” too. Someone should really tell them its a huge set back when your employee cringe at the rep giving the presentation!
April 3rd, 2009 at 12:58 pm
My question to anyone who can answer is this – the family owned company I work for switched our company managed retirement fund over to a 401K. They had a rep come to give everyone information concerning the plan. The guy spoke way above our heads – yes he did ask for questions BUT if you have no idea what he was talking about or have no prior knowledge about 401K plans, how can you ask intelligent questions? Another question that most all employees have is this: At no time were we informed of how any administrative fees were calculated. The person who is the “go to guy” if employees have questions comes across as not knowing what he is talking about or else he refers you to the web site. We all knew we would loose money because of the drop in the stock market but had no idea the “cost” of this firm handling our 401K funds. It has averaged out for myself that every $100 I put in they take $30 for fees of one sort or another. Is this usual? The answer I get at work is “you don’t get anything for nothing! did you think it would be free”. Any comments would be appreciated.
April 13th, 2009 at 8:19 pm
Doris,
An HR director at another company sent me your message. I thought I would reply. I’m an independent investment advisor and I help companies evaluate thier 401k plans. It is your companies fudiciary responsibility to look into plans that give good service for a resonable fee. If you’re plan is really paying $30 for $100 being invested then you are clearly paying too much. You should not be paying 30% in 401k fees. Fees are based primarily on the plan’s asset size and number of participants. If you would like help or would like to get me in touch with the investment commitee, I would love helping evaluate your current plan and compare it to others available. Please contact me at cean.rogers@ironwoodfinancial.com if you would like help.
Bullish Regards,
Cean
May 8th, 2009 at 7:32 am
A good representative and human resources employees will encourage participation ESPECIALLY when the market is down, highlighting why we should buy now.