There’s a missed opportunity
lurking in retirement plans: Lack of frequent reviews on how effective those
plans are in preparing employees to afford retirement at the proper time.
That’s according to the 2016
MassMutual Retirement Plan Review Study, which found that while many plan
sponsors say they want to review their retirement plans more often than they
currently do, many sponsors want advisors to help them do so.
Fifty-seven percent of plan
sponsor respondents said they want advisors to help them review their
retirement plans semiannually or even more often, but 44 percent of sponsors
report that such reviews currently take place.
Sponsors who rely on advisors,
the study found, typically review their retirement plans more often than
sponsors who do not use an advisor. The study also found differences in focus
between sponsors with an advisor as opposed to sponsors without an advisor.
During plan reviews, sponsors who work with an advisor typically prioritize
satisfaction with their plan provider. Sponsors without an advisor, on the
other hand, prioritize fees and costs.
Among other findings: For
sponsors with an advisor, 45 percent cite employee participation rate as a major
consideration, while only 34 percent of sponsors without an advisor do. In
addition, half of those with an advisor say that the effectiveness of education
and advice is a consideration, while just 31 percent without an advisor do so.
Sadly, lowest on the totem pole
is the question of whether employees are saving enough. Even among sponsors
with an advisor, just 27 percent of sponsors said that was a major
consideration; among those without an advisor, only a quarter did so.
“Advisors can do a world of good
to help employers focus on savings, the effectiveness of education programs,
and perhaps the ultimate metric: whether their employees on target to be
retirement ready,” Tom Foster Jr., spokesperson and practice management leader
for MassMutual Retirement Services, said in a statement. He added,
“Participation in the plan is certainly important too. But if every employee
participates but each saves only 1 percent of his or her salary, it’s totally
ineffective as no one will ever be prepared to retire.”
here for the original article from Benefits Pro.