The Employee Benefit Research Institute recently released its annual Retirement Confidence Survey which confirmed what everyone already knew. Americans are living longer and we don’t have enough saved for retirement. Of those surveyed, only 66% reported saving anything for retirement in the last year, down from 75% in 2009. Pension plans are disappearing from the retirement equation as the “three legged stool” of retirement (pension, Social Security, and 401k) slowly becomes a two legged stool where the second leg (Social Security) is looking a little wobbly.
So what is the employer’s roll in securing their employees’ retirement future? Could it be time to take on a more paternalistic roll when evaluating your 401(k) plan?
Consider a few of these changes suggested by the Summit Group’s March 2013 Newsletter “In the Know”
- Auto Enrollment
- Auto Escalation
- Adjust matching formulas to encourage greater savings
- Limit distribution options before retirement (hardship withdrawals & participant loans)
- Ensure your 401(k) has a good investment default
- Limit the confusion by providing easy to choose options
- Evaluate plan costs & fees
- For the extra-generous, consider the company paying administrative costs