The economic uncertainty caused by COVID-19 has left some employees concerned about their retirement readiness, making it imperative that employers provide resources and support to ensure their people can live out their golden years financially secure.
In order to help employers achieve this goal, Morgan Stanley at Work has expanded its partnership with Empower Retirement, a retirement plan recordkeeper, and created a platform where their shared clients can access stock plan and retirement balances through a single portal, providing employees with a holistic view of their assets and wealth.
“To effectively prepare your employees for retirement, one of the most effective ways to reach retirement investment objectives is to participate in a workplace retirement plan early,” says Anthony Bunnell, head of retirement for Morgan Stanley at Work. “It’s important to help them connect the dots between their goals: where they are today on their financial journey, and how they can extract the most value from their workplace benefits.”
Bunnell shared his thoughts on navigating the challenges impacting retirement, mistakes employees make on their retirement journeys and ways employers can step up and provide support in a recent interview with Employee Benefit News.
What are some common mistakes employees are making when it comes to planning for retirement?
Sometimes it’s hard to see blind spots, and easy to be overconfident about our financial stability. Gallup’s State of the Global Workplace 2021 Report found that 56% of employees reported themselves as thriving [financially], yet a 2020 report from the Federal Reserve Board found that 25% of adults have no retirement savings whatsoever, and in 2019, three in 10 didn’t have enough saved to cover three months of expenses. These numbers don’t quite add up.
There’s often an awareness gap between the workplace benefits companies offer and how employees engage with and use what’s available. Just 62% of workers are confident they will have enough put away [for retirement], and the first place they turn to for help is their employers.
What benefits and programs should employers have in place to help employees reach their goals?
Participating in a workplace retirement plan may be the single easiest way for employees to retire when and how they would like. Nine in 10 employers use a financial adviser to help navigate the complexities that come with that retirement plan, so whether it’s finding the right recordkeeper and administrator for the plan, helping understand the fund selection process, or helping employees understand the value in a company-sponsored retirement benefit, a financial adviser can add enormous value.
More and more, we’re seeing a need for personalized solutions that can help people navigate the complexities of their current financial needs, while not sacrificing future financial goals. That’s where employers can make a meaningful impact through thoughtful and flexible workplace benefits. Retirement is a key building block of any workplace benefit offering, but employers can increase the impact they can have on their employees’ financial security by taking a more holistic approach. For example, many clients today also want help tailoring their retirement savings to help them budget for evolving lifestyles and needs up to and throughout their golden years.
It’s also important to understand that achieving successful retirement investment milestones doesn’t happen in isolation. Employees are balancing the rest of their financial lives, and employers can help them better prepare for retirement by taking a 360-degree view of addressing financial pain points.
How can employers encourage engagement in the benefits that are available to their employees?
There’s often an awareness gap between the workplace benefits companies offer and how employees engage with and use what’s available. A critical step towards retirement readiness is for employees to make sure they’re making the most of what is offered by plugging in and learning more about their workplace benefits, whether it’s maximizing a 401(k) match or mastering key terms and definitions for an equity compensation plan.
Encourage employees to begin assessing their retirement needs now. What type of lifestyle do they want to live in retirement, and how much will it take to get there? It’s important that employers remember to speak with their workplace benefits partners about educational content they may have at the ready that can help boost employee engagement. By providing access to guidance and the opportunity to discuss educational content with a financial adviser, employers can increase the likelihood of their team participating in the retirement plan and in turn the potential for them to reach their long-term financial goals.