The financial pressures on workers are many. Student loans, home purchases, caregiving, and health expenses all get in the way of saving for retirement. No wonder financial worries weigh down on employees, impacting businesses too. The good news? Employers can make small changes that lead to big differences.
Getting Set for Retirement Success
It’s no secret that high levels of inflation have negatively impacted households across the country, forcing many workers to prioritize immediate needs over saving for retirement. The rising costs of homes, education and health care are taking a heavy toll:
“Less than half of employer-sponsored retirement plan participants are contributing at least 10% of their income to their savings, and only a quarter of savers are contributing 15% or more.” Women have been especially hard hit by financial challenges on the path to retirement, “with only 18% of working women having more than $250,000 saved for their retirement in their workplace retirement plan, compared to 25% of working men.”
The good news, however, is that employers can make a big difference in setting employees up for retirement success, and, as Ralph Ferraro, a leader at Lincoln Financial Group, points out, “research has shown that several factors can make a big difference in overall retirement outcomes and general wellness, regardless of gender.” Meaningful steps employers can take to improve retirement outcomes for workers include:
- Offering personalized support to retirement savers through a dedicated retirement consultant can help savers plan more accurately for their expenses in retirement; 82% of workers would be interested in working with a retirement consultant through their employer, or already do.
- Help employees plan for favorite pastimes in retirement to more accurately estimate costs and create a savings plan: 52% of workers said having a clearer vision of the retirement lifestyle they’d be able to afford if they increased their savings by a certain amount would motivate them to increase their contribution to their employer’s retirement plan. A conversation with a retirement consultant is a great place to start when planning, not just for everyday living expenses, but also for favorite pastimes in retirement, such as travel, golf or wellness activities.
- Provide access to financial wellness tools…that can help employees manage student loan debt, navigate surprise expenses and create a plan for managing costs to enable better savings: 38% of workers said having a roadmap for how to reduce debt and establish an emergency fund would motivate them to start or increase their retirement savings.
To jump start workers onto the path to retirement savings, employers can ensure plans make use of proven auto-enrollment, and auto-escalation strategies. Note for example: “62% of workers who do not participate in their employer’s retirement plan said they would be likely to remain in the plan if they were auto-enrolled.” In-plan guaranteed income options are also gaining steam, “with 68% of workers expressing interest and 35% of participants saying they would increase their contribution if offered the option.” Indeed, the time seems ripe for changes to options and services offered with company sponsored retirement plans. Although currently, most workers know they are saving less for retirement than they will ultimately need, they are eager to improve their retirement outcomes and open to the support employers can provide:
83% of workers report that they are ready to reevaluate at least one aspect of life, finances, work or retirement. As such, employees are increasingly looking to their employers for support, and workplace benefits and retirement savings plans provide an opportunity for employers to attract and retain talent, and to care for the financial and overall well-being of their employees. Small changes can make a big difference, both for workers seeking additional help and coverage for their financial future, and for employers seeking new ways to support their employees.
As plan sponsors across the country lean in to adjust benefit plans and services in response to employee challenges, this is also an important time to upgrade protection for themselves. Indeed, under the exceptionally high standards of ERISA, mistakes or oversights related to company sponsored retirement plans quickly lead to investigations and allegations of the plan–and its fiduciaries.
Remember, Colonial Surety Company helps plan sponsors with affordable Fiduciary Liability Insurance. A one-year policy, inclusive of 50k Cyber Liability Insurance, costs less than an hour of ERISA defense attorney fees in the event of a mishap. Colonial Surety’s affordable Fiduciary & Cyber Liability Insurance packages are specifically designed to help plan sponsors with:
- DOL Compliance: The Department of Labor stresses the importance of Cyber Liability Insurance, considering its absence as a fiduciary breach. Our coverage not only safeguards the plan but also protects your business.
- Comprehensive Protection: All our packages include Fiduciary Liability Insurance, ensuring your business and personal assets are shielded from the repercussions of fiduciary breaches. If you face claims of alleged or actual breaches of duty in connection with the employee retirement plan, you’ll be protected with defense costs and penalty limits up to $1,000,000.
- Cost-Control: Our packages are available for 1, 2, and 3-year terms, providing flexibility and locked-in rates.
If you already have an ERISA bond package with Colonial, you can even lock in your rates by upgrading to the 2 or 3 year package.
Protect yourself, your business and your plan for the go forward:
Fiduciary+Cyber Liability Insurance HERE
Providing customers with knowledgeable and friendly service since 1930, Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country.