As more baby boomers edge toward retirement, one question grows more urgent: Are financial services providers meeting the needs of workers participating in employer-sponsored retirement plans?
The findings of my research for my recent feature on worksite planning provide reasons to cheer. But they also raise troubling questions about unmet needs.
Unquestionably, the services and online tools that retirement plan providers are offering employees are improving. As I note in the feature, that’s true of both MetLife’s PlanSmart and retirewise offering and ING U.S.’ Retirement Readiness program.
Both of these initiatives help educate retirement plan participants about their companies’ employee benefits, thus aiding in boosting employee enrollment and plan contribution rates. The programs also avail employees of supplemental, face-to-face financial planning services independent of the company 401(k).
What Your Peers Are Reading
As an estimated 10,000 of the nation’s 78 million-plus baby boomers daily transition to retirement, the planning increasingly embraces not only wealth accumulation, but also retirement income planning.
“The conversation is no longer just about ‘how much’,” says Phil Michalowski, a vice president, for MassMutual Financial Group, Springfield, Mass. “It now includes what you want your housing, activities and lifestyle to look like in retirement so you can map out how you can efficiently and effectively build a retirement income stream to cover your anticipated non-discretionary and discretionary expenses.”
Why the continuing gap
The retirement programs from ING U.S., MassMutual and MetLife, among other providers, are to be commended. And yet Americans’ retirement preparedness, is in the main, woefully lacking — a fact point out not only by a recent EBRI survey, but other studies that regularly cross my desk.
Clearly, the macro-economic factors I cite in my feature account in part for the lack of confidence. Bare-bones employee benefit packages, either in respect to the retirement plan or individual planning services intended to supplement the company 40(k), also helps to explain the shortfall.
Consider, for example, employer contributions into plan participants’ 401(k) accounts. Allianz Life, I learned, matches dollar-for-dollar up to 7 percent of their employees’ plan contributions. That’s a generous offering, and one that less cash-rich businesses, in particular small businesses that operate on thin margins, might find difficult to replicate.