At a hearing before the U.S. Senate Committee on Health, Education, Labor & Pensions (HELP), Edward Moslander, senior managing director for Institutional Relationship Management at TIAA-CREF, noted that the traditional "three-legged stool,” which consists of defined benefit (DB) pension plans, Social Security, and personal savings acquired through defined contribution (DC) plans, has become increasingly unsteady. “Retirement has become much more of a ‘do-it-yourself’ proposition, where a large part of an individual’s retirement security depends on defined contribution plans,” he said.
Moslander pointed out that many eligible workers still do not participate in their DC plans, and those that do often have a difficult time saving the 10% to 15% of their annual income that most financial experts agree is necessary to achieve a secure retirement.“For this reason, it is extremely important that employers recognize that attaining retirement savings goals is a shared responsibility between employers and employees,” he stated.
Moslander suggested employers offer matching contributions that encourage employees to contribute, such as a dollar-for-dollar match when an employee saves up to a certain percentage of his or her salary.“In addition to providing a tangible incentive to contribute, matching contributions demonstrate to employees that their employer values saving for retirement and cares about their employees’ financial future,” he said. Moslander added that workers often have to make complex decisions about how much they should be saving and how to invest these savings; however, the lack of financial literacy across the nation often means that most are not equipped for these tasks. He said TIAA-CREF believes it is important to offer clients tools that can assist them with making these decisions, including user-friendly online programs, access to advisers either in person or over the phone, and comprehensive objective third-party advice programs.