Most employers (61%) plan to tinker with their retirement plans in the next 18 months. Want to know what they’re doing — and why?
The following comes from a recent Wells Fargo/Boston Research study of employers:
- Increase the number of investment options (14%)
- Boost the 401(k) match (12%)
- Add a Roth 401(k) option (12%)
- Introduce automatic enrollment (10%)
- Add automatic contribution increases (6%)
- Decrease the 401(k) match (3%), and
- Add an annuity feature to the plan (2%).
Of course the vast majority of these changes are designed to help employee savings and participation rates, but that’s not the main goal for employers that are offering retirement plans.
Fifty-one percent of companies admitted that helping workers achieve a sound retirement isn’t why they started a 401(k) — it was to keep high-performing employees happy.
Obviously savings and worker happiness go hand-in-hand, but the findings beg one question: Is perception more important than actual performance?
After all, employers are more concerned about worker appreciation for the plans (25%) than providing employees with the financial ability to retire (19%).
And if that’s true, here’s one word of warning: While attempting to boost employee appreciation for retirement plans, take steps to make sure that keeping track of employee investments doesn’t fall by the wayside.
Reason: In this economy, lawsuits are rapidly increasing from workers claiming that their employers have mismanaged their plans.