Many people budget for their short-term needs, like monitoring daily expenditures and monthly savings targets. This is certainly important for financial fitness. Sometimes when it comes to those long-term saving strategies like retirement, however, individuals can find these to trigger nerves.

Luckily with just a little upfront planning, 401(k)s can offer employees [for the most part] a set-it-and-forget-it long-term savings plan. But before getting all “eye of the tiger” and jumping blindly into a 401(k) offering for the sake of crossing off a coveted employee benefit from your checklist, buyer beware: not all 401(k) offerings are created equal.

What merits an employer-sponsored 401(k) as appealing to employees?

Well-regarded financial institution carrier

A well-regarded financial institution with a strong history is a good sign to employees that your retirement fund is solid. In addition, look for institutions that offer employees online access at any time, consumer-friendly guidance on finances, and freedom of choices. This will give your HR personnel a break from a revolving door of employees with questions.

Employer contribution matching

While many companies offer 401(k)s, it’s the ones with matching contributions that hold the best value in employees’ minds. The better the employer contribution matching percentage, the more likely you are to attract and retain talent. Defined contribution plans like a 401(k) are preferred by employers, too, because it puts the decision-making responsibilities in the employees’ hands.

Wide selection of funds to choose from

Think of your employees as radiant, beautiful snowflakes. (Yes, snowflakes.) Pat over in Accounting is a much different snowflake than Tammy in Service Support or Jim in HR, and therefore, so are their financial situations. Because of this it is imperative to offer numerous retirement fund options that can be tailored to age, available funds, and individual saving goals, so that one day they’ll be able to live someplace where they’ll never have to see a snowflake—or coworker—again if they so choose.

Free of lofty or unnecessary fees

If the funds you offer employees are high-fee, you’re not going to attract much interest. Generally, an expense ratio of 1.1% are good, but anything higher than 1.5% means participating employees are cutting the financial institution carrier a major check out of their retirement fund. 

The devil is in the detail, so check exactly how financial institution carrier lists their fees. Some are clearly labeled, while others add this cost to employee fund expense ratios. Your company should also be footing the bill when it comes to administrator costs if you want to increase your charm with potential participants.

Not every company will be able to offer all these perks. You might not be able to offer a match with your funds, or find a carrier that comes with all the bells and whistles for participants. Alternative and additional perks for enrolling in a 401(k) are outside-of-the-box ways to reward employees for participating in your plan, but avoid offering a barebones 401(k) plan just to say you have one. While offering an employer-sponsored 401(k) to employees is rewarding for your company, remember to set it up with your employees in mind.