Fiduciary Links: Plan sponsors taking a closer look at retirement readiness
Posted by Kathy Stewart on August 12, 2013
>>>>Recent data suggests plan sponsors are paying more attention to the idea of "retirement readiness." According to a survey of plan sponsors, in its 12th Annual 401(k) Benchmarking Survey conducted by Deloitte, the International Foundation of Employee Benefit Plans (IFEBP), and the International Society of Certified Employee Benefit Specialists (ISCEBS), 84% of plan sponsors identified improved participant education as a focus area for their retirement plans, and approximately 78% of plan sponsors acknowledge retirement readiness as the number one area of concern. Sponsors are actually becoming more involved with retirement readiness as the survey also found that 61% now offer individual financial counseling and advice compared with 50% in 2012.
Having information regarding service provider costs and services at their disposal begs the question of whether plan sponsors also have a duty or willingness to assess retirement readiness. This article suggests they do.
The article suggests that plan fiduciaries need to understand whether participants are on track to meet retirement goals, instead of limiting their analysis to a review of retirement plan costs, in order to evaluate the overall success of a 401(k) retirement plan. That includes measuring plan improvement and determining how successful their actions are in preparing participants for retirement. For instance, they need to evaluate what service providers add value in that regard along with progress of any communications programs in contributing to plan participant retirement success. The article discusses that plan participants value retirement readiness and the attention to their individual needs including such factors as contribution rates and income needs.
Along those lines, a Blackrock survey released in 2012 found that plan participants who are, or become, engaged in plan participation through education become more confident of their ability to influence the outcome of their retirement. The study also noted that 60% of current plan participants surveyed want plan sponsor assistance to get through retirement while 75% desire help in knowing what they need to achieve financially security in retirement.
Now on to the best links of the week:
News and columns from the leading trade, consumer, and mainstream media:
- The 7 biggest challenges for advisors [InvestmentNews]
- Alts require due diligence [InvestmentNews]
- The Safest Retirement Withdrawal Rate is a Flexible One [WealthManagement]
- Obamacare's coming - and it could present an opportunity for pre-retirees who don't have group health insurance. [WealthManagement]
- Signs of Dementia: Connie Stone on Working with Older Clients [Financial Planning]
- Make big changes in your practice with four clear steps. [Financial Planning]
- The six cold calling skills you really need to get your sales numbers in the success zone. [ThinkAdvisor]
From the organizations/associations/government/academia:
- CEFEX certifies QRPS, Inc. of Raleigh, NC to the ASPPA Standard of Practice for Retirement Plan Service Providers. Read press release here. [CEFEX]
- FINRA elects two Governors, and appoints new Public Governor. [FINRA]
- Kara Stein Sworn in as SEC Commissioner [SEC]
- Geoffrey Aronow Named Chief Counsel and Senior Policy Advisor in Office of International Affairs [SEC]
From the blogs:
- The "Yale Professor" Letters on Fund Expenses [FredReish.com]
- Trending Topics for ERISA Plan Sponsors [FiduciaryNews]
- How I Help a Client Save $100k in One Meeting [The Investment Fiduciary]
- An X-ray of one affluent, educated and sophisticated investor's portfolio shows how it was chewed up by fees, by Ron Rhoades [RIABiz]
- Don't be fooled by Social Security benefits estimates [IN's Retirement 2.0]
Articles your clients are reading (or should be):
- Jason Zweig updates readers on DOL-SEC fiduciary rulemaking [Wall Street Journal]
- How to distribute your retirement funds. [US News]
- Boost retirement contributions with a spousal IRA. [US News]
- How to avoid working one more year. [US News]
- Stock market high, bond market woes, and some finance links. [The Chicago Financial Planner]
Have a link we missed? Leave them in the comments section or email us at blog@fi360.com. For more of the best links during the week, make sure you follow us on Twitter.
