Like anything important, people need a report card or gauge to help them know how they are doing along with coaching and constant nudging. At a TPSU program held at Vanderbilt University, the Director of Comp and Benefits at a 600-person company talks about a web-based application, a sort of retirement report card he used as a participant in his previous employer’s defined contribution (DC) plan that helped him keep on track.
The web-based application uses participant information about their account balance, investments and deferral rates to report how well that person is doing on the road to a successful retirement and then makes recommendations on how to improve their chances. In addition, the system generates email suggestions that continually remind the person about the recommendations which the plan sponsor attending the TPSU program thought was helpful to him.
The three ways to help people save more for retirement at work include:
- Plan Design – Using the Ideal Plan’s auto-features, employees are put on the right path unless they take action.
- Personal Engagement – Companies use their plan advisor to conduct group as well as one-on-one meetings.
- On-Line Solutions –Robo advice or the use of web-based tools like the one described at TPSU.
Why do we need all three? Because different people and even different generation react differently to each solution. And though the Ideal Plan will lead people to a better outcome, which is the simplest and easiest way to help people, people are much better off if they are actively engaged in saving for retirement. That engagement becomes especially critical at the time of retirement when people have to figure out what to do with their pool of money they accumulated to make sure it lasts a lifetime.
Surprisingly, most DC plan sponsors have the ability to incorporate all three methods without increasing liability, work and money if they have the right partners starting with an experienced plan advisor and including the right record keeper and investments. 401kTV provides a directory of qualified DC plan advisors as well as a tool to search for a new one.
