DC plan sponsors need to step up their support for plan members, suggests Towers Watson’s Retirement Attitudes Survey.
Overall, fewer than 40% of employee respondents to the survey think their employers are doing a good job of providing retirement tools and information. For employees age 50 and over and nearing retirement, that number decreases to 30%.
“In uncertain economic times, it is especially important for employers to provide DC plan members with better education and planning tools, to help them manage their retirement savings and to set and achieve reasonable expectations,” said John McIntosh, Towers Watson’s Canadian plan design issue leader. “Our research shows that employees value—and are therefore likely to use—personalized outreach such as face-to-face meetings and seminars, independent financial advice and personalized on-line modeling tools that reflect their specific pension benefits.”
Canadian employers, however, have been slow to respond to the request for help, citing cost considerations or plan design restrictions. However, “Without providing education and the necessary tools, employers run the risk of having more ‘hidden pensioners’ — retirement-ready employees who are working out of necessity rather than by choice,” McIntosh said. “Employers need to find a balance between managing plan costs and the risk of employees not being able to retire.”