We know it’s important to invest now for the future. So why is it so hard to save for retirement?
At our 13th annual DC Plan Summit, held in Mont Tremblant in February, delegates discussed how to get more employees enrolled in employer-sponsored retirement arrangements, how to keep them engaged and what needs to change from a regulatory/legislative standpoint to make DC plans easier for employers and more successful for members.
Here are a few suggestions for plan sponsors.
1. Get Personal
Targeted communication strategies are an effective way to get your plan members’ attention. Create communications for different demographic groups and use life events (e.g., marriage, the birth of a child, etc.) to encourage members to re-evaluate their savings goals and priorities.
2. Get Real
Retirement can seem like a far-off pipe dream to younger employees, so messages about saving for the long term may not reach them. Use today’s robust retirement planning tools to help members develop realistic and achievable goals. Also consider showing “mini-goals” with shorter time horizons to give them something more tangible to work toward.
3. Get Creative
Depending on the needs and wants of your workforce, a wealth of options is available to get the message out. Mobile technology is one trend to watch: if used effectively, it can be a powerful tool to increase plan enrollment and facilitate transactions.
4. Get Holistic
Retirement planning isn’t just about building a nest egg; it’s also about what your life will actually be like when you retire. Encourage plan members to visualize their retirement to make sure their savings goals align with their expected activities and lifestyle. And don’t discount the emotional and psychological aspects: retiring can be an abrupt life change that takes some getting used to.
5. Get Active
Some of the changes required to make DC plans more viable must occur at the government level. Lobby for developments that can make a difference, such as auto-enrollment and auto-escalation or legislation that protects plan sponsors, as in the U.S.
Finally, remember that while DC plan sponsors play an important role in supporting members, achieving savings goals is ultimately the individual’s responsibility. In other words, it’s up to you to make your retirement a success—whatever you envision it to be.
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