Worried about your retirement? You’re not alone. So, increasingly, is your employer. A new survey says America’s bosses are growing more concerned over their workers’ financial well-being and preparations for retirement. The only question now: What took them so long?
According to a survey of more than 300 U.S. employers by Willis Towers Watson, more companies say they will try to help their employees by focusing increasingly on retirement readiness and benefit adequacy. The results, based on a survey conducted in February and March of 2016, show 39% of firms that offer a defined benefit and defined contribution plan see their employees’ retirement readiness as a current risk. And more, or 44%, consider it a risk two years from now, according to the survey.
“We are beginning to see governance committees adopt a more holistic view to DC oversight,” said Dave Suchsland, senior retirement consultant at Willis Towers Watson in a statement. “They continue to review investments and plan fees, and they are also considering retirement readiness and how the program influences plan participants’ behavior to improve outcomes for them.”
It’s a welcome shift in employers’ priorities – the majority of defined benefit plan sponsors focus primarily on “monitoring investment fees” – 74% – and manager performance – 61% and the survey shows attention to benefit adequacy will more than double over the next two years to 38% from 18%.
But saving and investing is of course just the first piece of the retirement puzzle. Employers are also paying more attention to the challenge of helping employees figure out how to tap their retirement savings and create an income from their nest egg. Based on responses from 196 large and midsize U.S. employers, the firm found most employers prefer addressing this issue by providing education and planning tools and partial or systematic withdrawals during retirement.
The most common option employers chose (73% of those surveyed) was making systematic withdrawals during retirement. The majority also offered income planning tools (64%) and education (60%.) Just 19% had out-of-plan annuity options at the time of retirement while one-third included an in-plan managed account service and 22% had an in-plan asset allocation option with a guaranteed minimum withdrawal or annuity component.
“Employees and retirees face major obstacles as they try to save for retirement so that they have a regular, adequate income that secures their future,” according to Bill Dewalt, senior investment consultant at Willis Towers Watson. “This is particularly true at a time when employers are increasingly concerned about financial well-being and retirement readiness and life spans have lengthened and competing financial responsibilities make it hard to save for retirement.”
This article was written by Elizabeth Harris from Forbes and was legally licensed through the NewsCred publisher network.
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