Does a de minimis financial incentive work?

[Peter Gulia]

Section 401(k)(4)(A) allows providing a “de minimis financial incentive (not paid for with plan assets)” for a participant’s choice to elect deferrals.

BenefitsLink neighbors, have you seen anyone do this?

What was the incentive?

Who paid for the incentive—the employer? Or a service provider?

Did the incentive result in the behavior the payer wanted?

Did the payer find it received good value for the payer’s money?

[Paul I]

I have not had any clients offer incentives.

If I may add a question, has anyone seen a plan with an auto-enrollment feature provide an incentive either

• for making an affirmative election to elect deferrals,
• or for not opting out of the default election by the end of the plan's opt-out time period?

[Peter Gulia]

I had clients ask about providing an incentive. When they understood the employer had to pay for it, the conversation ended.

[Peter Gulia]

Has anyone seen a recordkeeper, investment adviser, or other service provider offer an incentive for a participant to choose deferrals?