A decade ago, the 2006 Pension Protection Act recognized the important behavioral finance concept of the “nudge”—the reframing of the decision-making process to subtly push the decision maker toward the optimal decision. We see this in the shift from opting-in to opting-out in modern 401(k) plan design. No longer limited to just the leading-edge, more plan sponsors have embraced this approach.

Auto-enrollment, auto-reenrollment, auto-escalation, and default investment options represent the first tip from the treasure chest of early behavioral finance research and have proven effective in increasing retirement savings rates. But you already know this. What you might not know are the four other 401(k) plan tips recent research has uncovered.

The second tip involves the concept known as “intertemporal choice.” Research says people tend to make better decisions if the implementation of that decision doesn't immediately occur. One study found a 32 percent improvement in decision making by moving the delay from one to two months. Many plans require a worker to accrue a minimum number of hours before being allowed to join. Rather than wait until an employee is eligible to ask them to start saving, why not ask them to make a decision on both their initial salary deferral as well as their annual escalation as part of their first day introduction to the firm? Actual participation in the plan may be months or longer away, but they are more likely to make the correct choice if asked to decide today.