While access to affordable retirement savings plans in the workplace is an ongoing and evergreen issue, new research shows signs of hope for the coming year.
According to LIMRA, 2019 will see an increase in access to workplace retirement savings plans for private sector employees.
This will be due to increased interest in multi-employer plans (MEP) and the rise of FinTech.
Recent federal initiatives, such as President Trump’s executive order to expand the number of small employers who can offer MEPs and the proposed Department of Labor rule expanding MEPs, have also helped pave the way for increased access to workplace retirement savings plans in 2019.
With regards to technology, LIMRA predicts artificial intelligence (AI) to grow both in the number of companies utilizing it and in its range of applications.
While many companies are already using this technology via chatbots and automated underwriting, a large percentage of executives see AI as being extremely important to business in the next three years.
AI is a natural extension of predictive modeling building and companies will look to technology to utilize their vast amount of data and to enhance the existing stills of data scientists.
Retirement plan access couldn’t come at a more needed time. Accompanying research from LIMRA finds that only four out of 10 small businesses, a sector generally considered to the backbone of American jobs and job growth, offer retirement benefits—either along with insurance benefits or alone.
The research organization’s Small Business and Retirement (2019) report also finds that Americans’ top financial concern is affording a comfortable retirement and access to a workplace savings plan is the most effective way to get people to start to save.
The good news is LIMRA research finds 40 percent of small business employers feel retirement benefits are more important now than three years ago with 57 percent say it is equally as important.
“While only 37 percent of companies with less than 10 employees say retirement benefits are more important now than three years ago, that number increases to 64 percent for companies with 50-99 employees,” it notes. “The larger the small business, the more likely they were to say benefits are more important today than three years ago.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
