Employee participation in retirement plans could be better, by some measures. How to improve it has long been a topic of discussion — and knowing what employees are looking for in a plan is a key factor in bringing that about.
It’s the Economy, S_____
What employees want can be a bit of a moving target — and can be affected by more short-term factors and trends. For instance, Icon Savings Plan in a recent survey found that economic stresses have changed retirement plan priorities.
|Factor||% of Employees Who Want it in Their Retirement Plan, 2020||% of Employees Who Want it in Their Retirement Plan, 2022|
|Access to emergency savings||53||78|
|Cash bonus instead of a match||55||80|
Icon further reports that 93% of all employees — those with access to a retirement plan and those without access to one — want the retirement plan in which they participate to be portable, so they can remain participants if they move from one job to another. Icon attributes this overwhelming desire to increases in job turnover and layoffs.
It’s All About Me
Laurie Rowley, Icon Co-Founder and President of Icon, in an interview with ASPPA Connect, said that in its research on participant retirement trends, Icon has found “a clear trend” — employees “want more employee-centric retirement benefits” as well as “a great user experience” that includes personalization.
And that is not unique to participants in private-sector retirement plans, Rowley says — it also applies to state-sponsored plans. She doesn’t think that participants in state-sponsored plans are any different from participants in employer-sponsored or individual plans regarding what they want in a plan. “I wouldn’t carve out what employees using state-sponsored plans want as a subgroup from the entire employee population — employees want the same features in their retirement plan regardless of how the plan is administered or who they work for.”
Cerulli in a 2022 study noted that private-sector retirement plan providers have invested substantial time, effort and money into financial wellness platforms. They add that more advanced programs incorporate journey-based designs, interactive multi-media, and targeted messaging to participants via email or text.
Like Icon, Cerulli in 2022 found a similarity between participants in private-sector and state-sponsored retirement plans. They suggested that state-sponsored retirement plans and state officials should pay attention to the importance of dedicated financial education tools and resources.
Some state-sponsored plans already do that — for instance, CalSavers, Oregon Saves, and Illinois Secure Choice dedicate sections of their websites to financial education tools and resources. However, notes Cerulli, they do this by directing users to public, government-sponsored websites such as those for the Consumer Financial Protection Bureau or Social Security Administration. Cerulli anticipates it “will take time” for such plans to offer the kind of services and resources as do their private-sector counterparts.
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