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“Let me show you how to overcome their objection – because they would love to have their objection overcome,” Edelman says. “They want to participate; they just genuinely feel that they can’t.” With an ultimate goal of 10% paycheck deferral, here is Edelman’s five-step process for getting even the least-willing employees into a defined contribution plan.
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1. Start with 1%.

Can’t get employees to commit to 6%, or even 3%, of their pay? If they still think that’s too much, “agree with them,” Edelman says. “Don’t argue, don’t try to convince them that they really can afford it – you’re not going to win that argument and they’ll get upset … and never want to talk to you about anything else.” Aim for the lowest possible deferral just as a foot in the door. It’s better than nothing, and you can always …
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2. Up it by 1%.

Once a plan is started, it should prove easier to increase the deferral, either automatically or manually. Participants rarely notice deferrals once they have begun. Keep increases low.
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3. Repeat until the bites get noticed.

For employees who never wanted into the plan, it may take them a surprisingly long time to object to increase features but, once they do, respect their objections. Halt the bumps, at least at first, so they have a chance to get accustomed to the new levels.
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4. After they stop complaining, resume increases.

“What you do is you get back to them in three to six months,” Edelman says. “You say to them: ‘By the way, do you still notice?’” If you do this over a period of three, four or five years, “they will get to a 10% rate.” But if even this proves a struggle – or if even 1% is an impossible request – you have one move remaining.
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5. Divert ½ of pay raises into the plan.

If employees simply refuse or aren’t capable of saving with the money they’re currently making, they may be more willing to play with future compensation. Those who turn down a 401(k) entirely might be convinced to pledge money they don’t have yet. “You don’t have that money now, so you won’t notice not getting it later,” Edelman says. “Your pay will still go up … and the other half we’ll just set over here.” It’s a safe way to get someone into the cycle, and from there increases can begin.
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