A Principal news release said its new Principal Retire Secure product also makes available one-on-one workplace financial advisor meetings to help people enroll, understand their investment options, develop an investment strategy and calculate their retirement savings needs.
Principal will also offer to make a financial advisor outside the workplace to help the worker develop a financial strategy for his or her personal assets.
“Retire Secure tackles investors’ fears, mistakes and even paralysis and apathy,” said Monica Kirgan, vice president of Individual Investor services at The Principal, in the news release. “The personalized program pinpoints employees’ individual retirement needs, giving them more confidence to face their financial fears and ultimately help them retire securely.”
The news release said the program’s components include:
- Easy Enrollment
- Smart Start: Enrolls employees at a set savings rate, which typically matches or exceeds the employer match rate, if offered.
- Principal Step Ahead Retirement Option: Helps keep retirement savings on pace by automatically increasing savings each year by a specified rate and time period.
Principal said the results of its initial pilot program involving 13,096 employee participants and 56 employers found that of employees who attended a one-on-one meeting and completed an enrollment form, overall participation in retirement plans increased 8%, average deferral increases were more than 3% and new participants deferred an average 5.7%.
Twenty-three percent of participants completing enrollment materials selected the Principal Step Ahead option. On average, employees chose to increase their savings rate by an additional 1.2% of salary each year for four consecutive years. Meanwhile, 40% of new participants chose the Smart Start option, 34% of employees chose to meet one-on-one with a Retire Secure team member and 13% of those participants completed a Retirement Planning Analysis.
Also, the number of participants using the asset allocation models was three times higher following the introduction of this program, with nearly 50% of participants who participated in one-on-one meetings choosing target-date or risk-based asset allocation investments.