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Minnesota employers push for 401(k) enrollment, direct deposit

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in Small Business Tax Deduction Strategies

Twenty Minnesota employers, including Target and the University of Minnesota, aim to convince more employees to contribute to their retirement savings plans and use direct deposit for their pay.

As part of the employer-organized Financially Fit Minnesota program, the firms are addressing two problems in their state: First, less than half of Minnesota workers participate in an employer-sponsored retirement savings plan and, second, many do not have bank accounts.

The organizations’ efforts will affect 15,000 employees of all income levels over two years, but project organizers say the goal is to reach 50,000.

Even companies with high rates of participation have pledged to increase their numbers, mostly through a three-step strategy:

  1. Changing retirement savings programs from opt-in to opt-out, which could increase the number of employees who enroll and get a percentage match for dollars they set aside.
  2. Increasing the average employee salary deferral percentage for the 401(k).
  3. Targeting communication about retirement plans or direct deposit to nonparticipants, nonexempt employees and those without bank accounts.


  • Allina Hospitals & Clinics has a goal to get at least 90% of match-eligible employees to participate in its retirement savings plan. Allina increased the average employee deferral percentage and made comprehensive financial education available to all employees.
  • Best Buy will auto-enroll all new and current employees in its 401(k) programs, a move that will affect 1,200 employees.
  • Mortenson Construction is trying to get 100% of salaried employees to participate in its 401(k) plan by targeting the 20% who currently do not.
  • Metropolitan Council, the Twin Cities’ multijurisdictional public service agency, aims for 100% employee participation in direct deposit, and will place all new hires on direct deposit beginning this fall. Employees without bank accounts will get payroll cards.
  • U.S. Bancorp will hold educational seminars and mail information about its 401(k) to employees’ homes.

Contact: Rebecca Lechner, Financially Fit Minnesota, (952) 346-6402.

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