As their employee base ages closer to retirement, employers areadding tools to help those older employees better prepare for the bigday.

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That’s according to Aon Hewitt’s “2017 Hot Topics in Retirement and FinancialWellbeing” survey, which found that employers are taking actionto improve employee benefits and help workers plan for a securefinancial footing, not just now but when they retire.

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Not only are employers focusing on enhancing both accumulationand decumulation phases for defined contribution plan participants,they’re taking a range of steps to do so—from improved education toencouraging higher savings rates.

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Just 15 percent of respondents are comfortable with the averagesavings rate in their plan; among the rest, 62 percent are verylikely to act on increasing that savings level during 2017, whetherby increasing defaults, changing contribution escalationprovisions, or sending targeted communications to participants.

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And only 10 percent of employers are satisfied with employees’knowledge about how much constitutes an adequate amount ofretirement savings, and nearly all dissatisfied employers (87percent) are likely to take some action this year to help workersplan to reach retirement goals.

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In addition, more employers are providing options forparticipants to convert their balances into retirement income.Currently just over half of employers (51 percent) allowindividuals to receive automatic payments from the plan over anextended period of time.

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They’re also derisking through various means, whether byadopting asset portfolios that match the characteristics of theplan’s liabilities (currently 40 percent of employers use thisstrategy, but the prevalence is expected to grow to more than 50percent by year end), considering the purchase of annuities for atleast some participants (28 percent are considering this action) orplanning to offer a lump-sum window to terminated vestedparticipants (32 percent are in this camp).

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Why are employers suddenly so interested in how well employeesare financially prepared for retirement?

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According to Rob Austin, director of retirement research at AonHewitt, not only do employees not really understand how to converta lump sum retirement plan balance into retirement income that theycan live on, and employers are also worried that employees willmishandle that lump sum when the time comes and end up broke.

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So some employers are tackling the issue by folding in moreinformation about 401(k) plans with the annual enrollment process,in an effort to get employees to think more holistically abouttheir benefits packages.

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They're also encouraging them to consider increasingcontributions to their retirement plan while they’re alreadyenmeshed in other enrollments.

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