Employers want their workers to think about all elements of retirement – not just 401(k) s – and are planning to help them do so, according to an Aon Hewitt survey.
The companies plan to offer a two-pronged approach that concentrates on helping employees with investment advice while making sure they understood daily financial decisions have an impact on how much they'll have to spend during retirement, the poll determined.
At the same time, many employers said they plan to keep their eye on the overall health of their funds and take steps to minimize risk.
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The survey, which queried 400 companies last fall, found that reducing investment fees could help plan participants by keeping more money in retirement accounts. One-third said they were actively reviewing the options they offer with an eye on reducing fees. More than 15 percent said they were cutting those fees by moving from mutual funds to institutionally managed separate funds.
Sending a "loud and clear message" that retirement goals "must align with goals for overall financial well-being," Aon Hewitt found that more than 75 percent of employers were "very or somewhat likely to introduce or expand their focus on the financial well-being of their employees in 2014."
To that, end, employers said they focus some of their energy on education by offering tools and advice, and would continue to do so. For instance, 63 percent said they make available modeling tools to help plan participants figure out the best investment and savings mix and 25 percent said they were very likely to provide some assistance to help employees with budgeting their money.
For many companies, providing advice extends to making professionals available to offer independent investment advice. Nearly half of businesses (44 percent) said they make such advice available online; 35 percent set up such interaction over the phone; and about a quarter (23 percent) allow in-person meetings.
Managing risk will continue to be a focus of companies with defined benefits plans. About 12 percent said they had put in place systems to monitor their plan's funded status, while one in six have adjusted their investment mix to match the plan's liability.
About 12 percent said they had recently offered retirees and vested former employees a window in which to receive a lump sum payment of their pension benefits. Another 14 percent indicated they are very likely to do so this year.
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