Posted by Kathy Stewart on August 12, 2013
>>>>Recent data suggests plan sponsors are paying more attention to the idea of "retirement readiness." According to a survey of plan sponsors, in its 12th Annual 401(k) Benchmarking Survey conducted by Deloitte, the International Foundation of Employee Benefit Plans (IFEBP), and the International Society of Certified Employee Benefit Specialists (ISCEBS), 84% of plan sponsors identified improved participant education as a focus area for their retirement plans, and approximately 78% of plan sponsors acknowledge retirement readiness as the number one area of concern. Sponsors are actually becoming more involved with retirement readiness as the survey also found that 61% now offer individual financial counseling and advice compared with 50% in 2012.
Having information regarding service provider costs and services at their disposal begs the question of whether plan sponsors also have a duty or willingness to assess retirement readiness. This article suggests they do.
The article suggests that plan fiduciaries need to understand whether participants are on track to meet retirement goals, instead of limiting their analysis to a review of retirement plan costs, in order to evaluate the overall success of a 401(k) retirement plan. That includes measuring plan improvement and determining how successful their actions are in preparing participants for retirement. For instance, they need to evaluate what service providers add value in that regard along with progress of any communications programs in contributing to plan participant retirement success. The article discusses that plan participants value retirement readiness and the attention to their individual needs including such factors as contribution rates and income needs.
Along those lines, a Blackrock survey released in 2012 found that plan participants who are, or become, engaged in plan participation through education become more confident of their ability to influence the outcome of their retirement. The study also noted that 60% of current plan participants surveyed want plan sponsor assistance to get through retirement while 75% desire help in knowing what they need to achieve financially security in retirement.
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