To avoid stalling, re­tire­ment readi­ness ini­tia­tives need boost

Employee Benefit News - - Contents - BY MARGARIDA CORREIA

Em­ploy­ers must hit the throt­tle by pro­vid­ing em­ploy­ees with per­son­al­ized re­tire­ment readi­ness scores, deeper met­rics.

Em­ploy­ers must do much more to help their em­ploy­ees pre­pare for re­tire­ment be­yond of­fer­ing a 401(k) plan.

For one, they can step up their game by pro­vid­ing em­ploy­ees with per­son­al­ized re­tire­ment readi­ness scores, said Jerry Yen, vice pres­i­dent of strate­gic part­ner­ships at Guid­edChoice, dur­ing a panel last month at the Ben­e­fits Fo­rum & Expo.

What em­ploy­ees need to know is not what their 401(k) ac­count bal­ance is but rather “what it’s worth to them on a monthly in­come ba­sis,” he said at the con­fer­ence in New Or­leans, hosted by Em­ployee Ben­e­fit News and Em­ployee Ben­e­fit Ad­viser.

Yen en­cour­aged em­ploy­ers to pro­vide em­ploy­ees with “spe­cific as­sess­ments about what they need to do now to be able to re­tire” and to “get deep into the an­a­lyt­ics” of their 401(k) plans to de­ter­mine met­rics, such as re­tire­ment in­come ra­tios, for each em­ployee. These ra­tios help work­ers de­ter­mine whether they can match their cur­rent liv­ing stan­dards in re­tire­ment.

Armed with these met­rics em­ploy­ees would then be able to make choices that will help them get on track, Yen said.

Em­ploy­ers would sup­ply 401(k) plan data from their record-keep­ers to ven­dors to run per­son­al­ized met­rics for each em­ployee.

HR pro­fes­sion­als es­pe­cially have an im­por­tant role to play in ad­vanc­ing mea­sures to en­sure em­ployee re­tire­ment readi­ness, ac­cord­ing to Jackie Ward, chief hu­man re­source of­fi­cer at New­port Group, an in­de­pen­dent re­tire­ment and ben­e­fits provider.

When talk­ing to se­nior man­age­ment, HR pro­fes­sion­als need to be “an ad­vo­cate” for em­ploy­ees. They need to make sure re­tire­ment readi­ness is on the agenda and that it’s talked about “not just dur­ing open en­roll­ment but through­out the year,” she said.

She noted that com­pa­nies of­ten think that once they’ve put a 401(k) in place, their ef­forts and re­spon­si­bil­i­ties are over. An em­ployee 401(k) plan, she said she re­minds clients, is “just the ic­ing on the cake.”

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