Employers still place a priority on retirement readiness, according to Steve Ulian, head of institutional business development for Bank of America Merrill Lynch. “Our research found that 81% of employers believe it is their responsibility to ensure the financial well-being of their employees. And 50% of employers believe that the topic of employee financial benefits is more important now than it was five years ago,” the Boston-based Ulian told PLANSPONSOR.
The areas of improvement, he says, lie in the sources and delivery of information needed by employees. “Seventy-three percent of human resource professionals believe they need more expertise in communicating information about employee benefits, especially in the area of health care,” says Ulian.
“Plan sponsors realize they have a limited capacity to provide expertise,” he adds. “So, they are often turning to their existing service providers for help. If the situation calls for it, some plan sponsors are turning to more specialized providers, especially if there are technological factors involved. If it’s a health care issue, some turn to their health insurance provider for the expert information they require for their employees.” The exceptions, says Ulian, may be the larger retirement plans, which have in-house resources they can turn to for such information.
As for the delivery of information to employees, says Ulian, variety, frequency and simplicity are all helpful parts of the process. “Sixty-nine percent of employers believe they should increase the number of communication methods. And while 66% say they think they should increase the frequency of communications, currently 55% say they only send out communication pieces once a year, if that.”
In addition, 79% of employers believe they need to provide more financial advice for their employees. Ulian says this is a way of doing something to get more value out of their retirement-related employee benefits.
He recommends employers become more methodical in explaining issues in communication pieces, as well as use a multi-platform approach to ensure no one is excluded. “Having issues written in plain language is also helpful, as 41% of employees say they are too busy to use tools that assist them in retirement or investment related matters, and 35% say they don’t use such tools because they are too complicated. Plus they need to be accessible where and when the employee wants.”
Ulian says plan sponsors shouldn’t make assumptions, but do research to determine the appropriate delivery method for information. “Some sophisticated technology firms turn out to have many employees that prefer one-on-one meetings. By the same token, employees of industrial or manufacturing firms may actually prefer web-based meetings or tools.”
For the report, a nationwide online survey of 1,000 employees was conducted by Boston Research Group, on behalf of Bank of America Merrill Lynch, during the month of August. Financial benefit plan sponsor companies had to offer a 401(k) plan in one of three categories—small, core and mega. Small plans were defined as having less than $5 million in plan assets. Core plans had $5 million to less than $100 million in plan assets. Mega plans had $100 million or more in plan assets.
More information about the report, including how to download it, can be found here.