Grow Your Retirement Part 1: The Case for Education

Employers spend a lot of money on Defined Contribution (DC) and Defined Benefit (DB) retirement programs.  Designed and communicated properly, an employer-sponsored retirement Plan can be a valuable benefit, far beyond the tax advantage of sponsorship.  All employers want a workforce that is bright, loyal and dedicated to the company’s success.  Benefits, including retirement Plans, can help recruit and retain quality employees.  

Retirement benefits are less tangible than health insurance or paid time off.   Education for employees is critical because: 

• If employees don’t understand, they don’t appreciate. (It’s not a benefit if it’s not perceived as such!)
• Employees who feel secure in their ability to meet their personal needs are more likely to focus on work.
• When employees reach retirement age, it helps the exit process so that employees are less likely to stay on in the workforce simply because they need the money.

 

Good employee education and communication is an on-going process.  More about that later! 

Employers (Plan Sponsors) need education, too.   Retirement Plan requirements are often murky and come with a language all their own.  Knowing the true impact of the underlying provisions of their program is important for employers who need to understand:  

• Cost vs. Value – Plan Sponsors must have a clear understanding of Plan fees and the services they receive in return.  Know your apples and oranges!
• The sustainability of the program - Is the Plan designed to meet your corporate goals?
• Attracting and retaining employees – Is your Plan competitive with the marketplace?

 

These questions can best be answered by trusted advisors.  Need one?  Do your homework and find out who in your community is recognized as an expert.  Ask questions and don’t hesitate to drill until you understand the issues.  Your company is unique; don’t settle for a one-size-fits-all benefit plan.   

 

Lisa Pfautz
Markley Actuarial