With so much on their plate trying to get their business back to “normal” these days, plan sponsors don’t want to deal with the details of their retirement plans right now.
That’s a primary takeaway from Pentegra’s 2020 Retirement Plan Trends Study released Oct. 26, which looks at the top challenges businesses are facing as well as the kinds of assistance employers and employees alike are seeking with respect to their retirement plans while navigating the current COVID-19 era.
The study, conducted June 1-Sept. 30, found 54% of the more than 250 U.S. employers responding (with retirement plan assets range from $1 million to $175 million) said they do not spend much time on their retirement plan right now. Additionally, 34% said they spend some time on it, but could use help managing the details of their retirement plan.
Besides commenting upon the challenges they have faced during the pandemic and what they are doing to overcome them, respondents discussed what they think “the new normal” will look like, both for their firms and for their retirement plan strategies.
“Throughout our conversations, clients shared employee concerns about emergency funds and saving for retirement,” said Richard Rausser, Senior Vice President of Client Services at Pentegra. “Some expect that the crisis may have a positive long-term impact on saving and spending habits, with employees more aware of the importance of saving for retirement.”
In addition to reinforcing the fact that clients recognize that offering a retirement plan is important for their business—and the critical role it can play in attracting and retaining talent—Pentegra’s research found that workplace safety—whether onsite or remote—continues to be top of mind for employers. Retirement security, along with financial wellness, continue to be key sources of concern for employees.
“Clients are finding new ways to reach their customers online. They’re making adjustments to how and when they do business, and working hard to help employees balance family obligations at the same time, Rausser said. “Given the blurred line between work and home life, clients also shared concerns about employee stress levels and mental health along with their own stress levels.”
When it comes to fiduciary duties associated with offering a retirement plan, many of the survey’s respondents prefer outsourcing such work to a professional fiduciary, particularly during this challenging time.
“The study afforded us an opportunity to connect and empathize with the struggles that our clients are experiencing,” Rausser said. “We were pleased to help alleviate sources of concern with fiduciary services that allow us to take on more of a direct role in administering their retirement plans so that they can focus on running their businesses and getting back to normal.”
Additional report highlights include:
- 40% say they want to help their employees overcome concerns about their retirement security but have to focus more on getting their business back to normal.
- 43% report that they are encouraging their staff to remember that their 401k plan is a long-term investment meant for retirement.
- 45% say that the No. 1 stress-causing factor for their employees are concerns about their physical safety.
- SEE ALSO: Pandemic Hurts Worker Confidence in Saving for Retirement
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
