There is growing interest among plan sponsors to offer their workers education and resources to help them decide how much they should save, how to invest, and how to prepare for retirement. This is particularly true in the health care segment where there is:
- a diverse workforce with varying degrees of financial literacy;
- a workforce with “around-the-clock” and varying schedules;
- continued expansion of, and consolidation within, the industry; and
- a shortage of staff and a need for recruiting top talent – particularly in the nursing field.
We all know that retirement plans are not one size fits all. The health care segment demonstrates a significant challenge in that education and solutions need to span a wide breadth of needs including multi-lingual resources and support for varying levels of sophistication in terms of financial literacy. It is critical that a retirement plan be tailored to the needs of all employees and in line with the plan sponsor’s goal for retirement and total benefits offering.
A hospital system’s retirement plan education program may be the only source participants have for retirement savings. Retirement education takes many forms and most retirement plan providers offer written materials such as brochures and pamphlets and traditional resources for employees including retirement plan information on provider Web sites. Some retirement plan providers also offer a high-touch support model that helps employees improve the likelihood that their retirement savings will be enough to sustain them through their retirement years. It is especially important for plan sponsors of health care organizations to choose a retirement plan provider that offers on-site retirement consultants or financial counselors and resources that can provide one-on-one financial planning, investment guidance, and consistent communications that help employees reevaluate their plans every year.
Health care workers are caregivers and are focused on improving the overall wellness of their patients….one at a time. Plan sponsors should expect their employees receive the same kind of carethey extend to their patients. This includes providing retirement benefits that appeal to employees’ overall retirement wellness, using strong technology or delivered in person by someone they have a lasting relationship with who cares about their overall financial health.
Providing an on-site resource also benefits the plan sponsor as it enhances the full suite of the employer’s benefits package. Health care will generate 3.2 million new wage and salary jobs between 2008 and 2018, largely in response to rapid growth in the elderly population. Additionally, virtually every job within the industry is expected to experience above-average growth in the next ten years. (Bureau of Labor Statistics, Career Guide to Industries, 2010-11 Edition) Because of this growing trend, Plan sponsors in the health care segment can use their retirement plans as a tool to help recruit and retain top talent.
While compensation, health care benefits, and flexible schedules are likely the first things that people look for when considering a new position or staying with their current employer, retirement plans have also become a top consideration for many employees in hospitals today. With potential changes in Social Security, defined benefit plans on the decline, tax increases, and rising health care costs, the burden of saving for retirement has shifted away from the employer and has become the responsibility of the employee. This new environment provides hospital systems with the unique opportunity to reevaluate their current retirement plan offerings as a meaningful way to attract and retain top players.
One way that health care organizations can help to enhance their retirement plan offering is through consistent and powerful employee communications’ programs. Employers in the health care segment should leverage their retirement plan providers to ensure they are consistently communicating to staff the importance of staying invested, reexamining their financial plans, taking advantage of company matches, and increasing their contributions. Retirement plan providers can host retirement planning events and educational seminars on-site at hospitals at varying times throughout the day to ensure all employees – during all shifts – are reminded of the importance of retirement planning.
Plan sponsors should work with a provider to ensure there is consistent and ongoing education around retirement readiness throughout the year – not just at the time of enrollment. Plan sponsors in a health care organization should never underestimate the power of consistent communications of the resources available to employees. Employers should leverage their retirement plan providers to ensure no plan participants are left behind in retirement and they are consistently communicating the importance of retirement savings to their employees.
By Linda Jacobsen, Head of Defined Contribution Customer Experience, Lincoln Financial Group
NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.