Employers need to take a fresh look at their retirement plans annually because there is still a significant problem with retirement readiness.
That was the consensus of panelists, including the AARP and a financial planner, during a recent Employee Benefit News and Employee Benefit Adviser webinar. While that significant national problem is slowly getting better, there remains a very severe problem, said David John, senior strategic policy adviser at the AARP Public Policy Institute. If you dont have a plan or are employee to an employer who does not have one, there will be a break in individual savings history, he explained. Since 1980, not much has been done to expand coverage of retirement plans.
Many small employers still do not offer retirement plans, John said, with more than 3-in-4 businesses with fewer than 100 employees not offering a retirement plan.
What works
Many organizations have not taken a step back at looked at their plan from a strategic level, said Alex Assaley, lead adviser, retirement plans, at AFS 401(k) Retirement Services.
When working through those meetings with his employer-clients, Assaley says he is asking the employer to think outside the box and to get away from simply reviewing investments and compliance. Instead, he encourages them to brainstorm about the purpose of the plan why they have it, what the plans goal is and what has changed in their business or employee base in the last five to 10 years.
We find [that for] many companies and organizations that have 401(k) and 403(b)s in place for 15, 20, 25-plus years, they havent really looked at it holistically, reviewing the plan design with the missions and values of the organization in mind, he said. If you go through this process and ask what you could change, you become open to results.
Assaley said he encourages every organization to have one meeting similar to that every couple of years.
Changing delivery
One item that tends to change as a result of these meetings is the delivery of retirement plan education. The need for engagement and communication around the retirement plan is key, he added. In-person group seminars and Web-based materials will shift and evolve over the next [few] years.
One shift is toward social media, which Assaley said is where employees spend their personal and professional time.
The key is to make retirement more entertaining, more engaging. Create an experience for employees that is engaging, but also optimistic, he said. On a daily basis, [were] seeing a lot of negativity on saving for retirement.
