agreed the plan should be designed appropriately for the group of employees. “Should
you auto enroll, what should be your QDIA, and what services may or may not
help employees, should they get one-on-one advice?” he queried.
told attendees the biggest impact they can have on participant success is to
provide financial literacy. And, employers should get Millennials involved. “Retirement
isn’t usually talked about at all until someone gets to middle age, and in the
defined contribution (DC) plan world, that is way too late,” he contended.
factors are affecting retirement savings decisions, added Kidwell. For example,
since enactment of the Patient Protection and Affordable Care Act (ACA), more
plan sponsors are moving to DC health plan offerings. “Employees can’t decide
how much to defer into their retirement plan. Now they are asked to decide that
and how much to defer into health savings accounts (HSAs),” he said.
contended that HSAs are going to become part of participants’ overall retirement savings.
talking about retirement readiness, we’re talking about a participant’s net
worth, not just account balance,” Kidwell said. “Financial wellness helps
people with all financial decisions.”
trend for which providers are preparing is education at retirement. “It’s a role
employers are going to have to begin to take,” said Smith. “They can’t continue
to say, ‘The employee left. I have no more obligation.’”
said there will be more focus on total retirement education, including
education about non-traditional ideas like reverse mortgages.
Plan sponsors must
find unbiased people to talk to participants about what to do with their assets
when they exit the plan, Smith contended. They should offer alternatives that
do not benefit the person educating participants. “Older workers cost employers
more money, so they need to help employees retire, educate them about their
options, push them to retire and offer advice,” he added. “Employees want that
type of help; they want to be told what to do.”