U.S. employers don't do enough to help their employees make critical decisions at the point of retirement, according to a national survey of U.S. benefits directors commissioned by Transamerica Retirement Management.
The national survey questioned benefits-program decision-makers across a broad range of industries on the topic of retirement transition—the period just before and just after retirement when critical retirement preparation decisions need to be made. The survey examined whether benefits directors believe that employees have the resources, support and savvy to make sound decisions, and it uncovered a high level of concern:
• An overwhelming majority (80 percent) of benefits directors said their organizations do not prepare employees sufficiently to manage their financial resources successfully in retirement.
• Most benefits directors lacked confidence in how capable employees are at making sound decisions about retirement preparation, with 35 percent rating their employees as “somewhat not capable” or “not capable” and 45 percent rating their employees’ capabilities as “neutral.”
“For decades, employers have devoted a wide range of retirement resources, matching retirement plan contributions, employee-education efforts and the like, toward the goal of helping their employees enjoy positive retirement lifestyles,” said Transamerica Retirement Management CEO Phil Eckman. “Add in the immense resources of the Internet, and today’s employees should, theoretically, be better equipped than ever to make good decisions. But the nation’s benefits directors are telling us the opposite.”
For many U.S. workers, Eckman continued, "the employer is the primary source, and sometimes the only source, of information and support for retirement preparation. Benefits directors walk this path with employees and therefore have a unique position from which to gauge whether employees on the cusp of retirement have the wherewithal to make good decisions, which is what makes these findings and their viewpoints so compelling.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Retirement Coaching Gives Employees a Handle on Future, SHRM Online Benefits Discipline, March 2011
Income-Replacement Goals Overlooked by Plan Sponsors, SHRM Online Benefits Discipline, January 2011
Cashing Out: Help Employees Make Smarter Distribution Decisions, SHRM Online Benefits Discipline, December 2005
SHRM Online Benefits Discipline