Concern for — and plans for action about — retirement plans is widespread among employers. Aon Hewitt studied 250 employers with six million employees, and in 2015 Hot Topics in Retirement found that employer-provided retirement plans remain central to retirement readiness, and that employers know it.
Financial Wellness
The vast majority say they are likely to create or expand their focus on participants’ financial wellness in 2015, and that includes retirement readiness and decisions about retirement. Three quarters plan to implement initiatives to address retirement savings gaps.
They’re concerned about older employees who are nearing retirement. Seventy-two percent expect to have more employees eligible for retirement in the next three years. Accordingly, 70% say they are going to provide retirement planning services to employees who are close to retirement.
But they’re looking ahead, too: 75% say they plan to evaluate their retirement plans to make sure it will meet the needs of future employees. And nearly as many — 72% — plan to measure or project the adequacy of their employees’ expected retirement income.
Concern over financial wellness also manifests in the view, held by 77%, that it’s important to minimize leakage resulting from plan loans and early withdrawals. A majority say they plan to do something about that this year. The means they plan to use include:
Nearly all — 94% — say they plan to encourage employees who participate in DC plans to increase their contributions to their accounts. Almost as many plan to help employees recognize retirement readiness, and 87% plan to increase employee participation in their DC plans.
Defined Benefit Plans
Almost three-quarters have a DB plan that covers at least some of their employees. But the status of those plans is all over the map. Approximately one-third each have plans that are open, closed or frozen.
Many are paying attention to their funding level: Almost half have conducted an asset-liability study. And they are using that information. Thirty-six percent have adjusted plan investments to better match plan liabilities, and 26% have put measures in place for daily monitoring of their plans’ funded status.
Plan Administration
Employers are paying more attention to plan costs and fees, according to Aon Hewitt. Almost half say they have reviewed total plan costs, and more than 70% of those who have not say they are very likely to do so this year. Almost one quarter have restructured their administrative fees.
Financial Wellness
The vast majority say they are likely to create or expand their focus on participants’ financial wellness in 2015, and that includes retirement readiness and decisions about retirement. Three quarters plan to implement initiatives to address retirement savings gaps.
They’re concerned about older employees who are nearing retirement. Seventy-two percent expect to have more employees eligible for retirement in the next three years. Accordingly, 70% say they are going to provide retirement planning services to employees who are close to retirement.
But they’re looking ahead, too: 75% say they plan to evaluate their retirement plans to make sure it will meet the needs of future employees. And nearly as many — 72% — plan to measure or project the adequacy of their employees’ expected retirement income.
Concern over financial wellness also manifests in the view, held by 77%, that it’s important to minimize leakage resulting from plan loans and early withdrawals. A majority say they plan to do something about that this year. The means they plan to use include:
- educating participants on the effect of taking a plan loan;
- making less loans available;
- implementing a waiting period between the loan plan payoff date and a new loan origination; and
- making plan loans unavailable.
Nearly all — 94% — say they plan to encourage employees who participate in DC plans to increase their contributions to their accounts. Almost as many plan to help employees recognize retirement readiness, and 87% plan to increase employee participation in their DC plans.
Defined Benefit Plans
Almost three-quarters have a DB plan that covers at least some of their employees. But the status of those plans is all over the map. Approximately one-third each have plans that are open, closed or frozen.
Many are paying attention to their funding level: Almost half have conducted an asset-liability study. And they are using that information. Thirty-six percent have adjusted plan investments to better match plan liabilities, and 26% have put measures in place for daily monitoring of their plans’ funded status.
Plan Administration
Employers are paying more attention to plan costs and fees, according to Aon Hewitt. Almost half say they have reviewed total plan costs, and more than 70% of those who have not say they are very likely to do so this year. Almost one quarter have restructured their administrative fees.
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