With the ever-changing landscape of retirement benefits and the laws around them, it makes sense that employees are taking a closer look at what companies are offering.
Appreciation for company benefits is on the rise, according to the 2022 Global Benefits Attitudes Survey from insurance advisory firm WTW. Three out of five say a good benefits package is a key reason to stick with an employer, a significant jump of 12 percentage points from the last survey, conducted three years ago.
People are acutely worried about how higher prices will impact their ability to maintain their desired standard of living in retirement. Close to one-third of workers think they will have to remain in the labor pool past age 70 or doubt they will be able to retire at all, WTW found. (Money)
This means that employees are taking a greater interest in how their money is being saved and not just accepting a one-size-fits-all approach. Which means their employers should take note.
Why is This Important?
If you think your employees’ worries about money don’t impact you as the business owner…think again.
Among financially stressed employees who are distracted at work because of their finances, 56% spend three hours or more per week at work dealing with or thinking about issues related to their personal finances.
Financially stressed employees are also more likely to leave. Only 54% feel there is a promising future for them at their employer, compared to 69% of employees who are not stressed about their finances. They are also twice as likely to be looking for a new job (36% of financially stressed employees compared to only 18% of non-financially stressed employees). And 73% of financially stressed employees say they would be attracted to another employer that cares more about their financial well-being compared to just 54% of non-financially stressed employees. (PwC)
So, having plans and resources in place for your employees to find what they need could have a direct impact on your bottom line: “On average, it can take a new hire one to two years to reach the productivity of an existing employee.”
Setting Up Retirement Plans that Retain Employees
While a lot of work still needs to be done in the world of financial education, people are starting to understand that retirement planning isn’t just about plugging in numbers to come up with a solution and that financial wellness isn’t limited to what funds they’re invested in.
Understanding an investor’s goals, educating them on how they’re saving their money pre- and post-tax, and making sure they understand how their employer match works are all part of creating a plan that the employee is happy with.
But here is the problem when it comes to creating a system that works: while you might think your employees are comfortable talking to you about their benefits, chances are they might not be as forthcoming about their financial situation as they would be with an impartial third party who is managing the plan.
Not only that, but as the business owner, you likely don’t have the time to spend on each individual employee who has questions and concerns.
The Benefits of Working with a Plan Advisor
Prior to our engagement, many of our Plan Administrators find themselves managing questions about the fund lineup, dealing with eligibility notifications, and chasing paperwork. Our service model ensures that the participants leverage our breadth of resources and engage our team for investment-related questions. We offer a highly customized plan participant content platform that is structured to optimize participant outcomes and increase financial wellness.
Our approach to designing a defined-contribution plan is: First identify the purpose of the plan itself. Both the plan sponsor and the advisory team must be on the same page as to the reason why the plan was initiated and how it aligns with the corporate culture. Once we understand what the employee benefit represents, we can construct the plan according to the intent of the plan sponsor and then begin the RFP process and shop the plan to the top providers in the market. Our RFP process ensures apples-to-apples comparisons and helps maximize a plan’s negotiation leverage.
Driven by robust technology, systems and services, PlanSimple’s financial professionals have a unique ability to help create successful retirement plan outcomes for plan sponsors and participants alike. Most advisors tend to focus on the Investment Analysis responsibilities of the plan, which unfairly places the other key administrative obligations squarely on the shoulders of the Plan Sponsor or Administrator.
At PlanSimple, our key tenants are Support, Consulting, and Guidance. Our comprehensive service model supports the Plan Sponsor and Administrator in the following areas of Plan Administration:
- Plan Governance
- Fiduciary Education
- Financial Wellness
- ERISA Compliance
- TDF Suitability
- Plan Design
- Fee Benchmarking
- Investment Analysis
Proper documentation is a must for Plan Fiduciaries. Our best practices will help you streamline your compliance processes and make sure your I’s are dotted and your T’s are crossed. Navigating today’s ever-changing and increasingly complex legal and fiduciary compliance landscape can be…well…a nightmare. Our goal is to help you sleep better at night with our in-house ERISA guidance. Our online, cloud-based file storage system provides 24/7 access to all of your important fiduciary documents.
PlanSimple’s consultative process highlights creative thinking and industry experience, which ultimately provides its clients with tailored solutions that become an extension of the company’s brand. We help fine tune the plan with the assistance of the Plan Sponsor and Administrator and become a strategic partner in the trenches, thinking about their business as much as they do. We offer an integrated technology platform that was built to help make your plan more efficient. Our plan design assessment process strives to increase the ROI on your benefits platform while enhancing participant retirement outcomes.
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