Keeping up with employee's evolving retirement needs

The survey shows better employee engagement when working with a single recordkeeper. Roughly 70% of employers working with a single recordkeeper report their employees are better engaged with all their retirement benefits—ranking 10 points higher than those who work with multiple recordkeepers. (This statistic references employers with multiple retirement plans.)

Since the advent of the pandemic, employers' perceptions about workplace benefits and concerns with the health and well-being of their employees have sharpened. Our Well-Being Index, Wave Two, August 2021 tells us that plan sponsors (73% on average) agree that financial wellness programs help in key areas, including keeping workforces engaged and productive, decreasing employee stress over debt, assisting with retirement preparation—and in turn, boosting employer hiring and retention.

Employers told us that they also view retirement benefits as an important way to keep current employees (65%) and attract new workers to their organization (56% according to our Q2 Retirement Security Survey, plan sponsor data from June 2021). As a possible result, we've seen employer-provided benefits rise over the past year and one-half, with 90% of surveyed businesses planning to increase their benefit offerings during the next 12 months.

These workplace complexities may feel even greater when retirement plans are handled by more than one recordkeeper—a practice that often necessitates participants track applicable plans through a combination of provider websites, apps, and call centers, or has plan sponsors juggling plans through several points of contact with different recordkeepers.

Our survey of multi-plan recordkeeping arrangements also suggests that employees may benefit from the holistic view employers working with a single recordkeeper can provide, helping to remedy what can be an otherwise inefficient experience—one that may lead to frustration and confusion for both sides. In fact, 73% of plan sponsors working with a single recordkeeper feel that employees have a holistic view of their retirement savings compared to 58% of plan sponsors working with multiple recordkeepers.

Helping employers save time and money

The recent September 2021 commissioned survey learnings demonstrate the value of working with a single recordkeeper for access to unique, end-to-end recordkeeping services. Employers with a single provider for their retirement plans revealed potentially significant time savings, features, and services—helping to streamline potentially duplicative processes and services to make plan administration easier.

Combining multiple retirement plans with one recordkeeper can provide meaningful perks—and not just for the employer. For example, when employers work with a single recordkeeper, they report increased employee satisfaction and higher engagement. They also believe their employees have a better understanding of their retirement plan benefits.

When asked to rate the desired outcomes from offering multiple retirement plans, our research also found that 73% of employers with a single recordkeeper noted "higher satisfaction with retirement plan benefits" in their top three (compared to only 60% of those working with multiple recordkeepers).

Our research also found that plan sponsors with multiple recordkeepers listed "acting as a middle person" with all of the providers as their number-one drawback. Additionally, 75% of plan sponsors with multiple recordkeepers think they'd save time by moving to a single recordkeeper. And, depending on the types of plans, sponsors who switched to a single recordkeeper estimated they reduced their time spent by 17% to 50%. The hourly time savings of using one recordkeeper translated to as many as 14 business days over the course of a year. (Based on the number of hours it takes to run the plan using a single recordkeeper or multiple recordkeepers [and the difference between those numbers]. Time savings ranges from 17% to 50% annually dependent upon plan combination; 50% savings represents the plan combination of DC and DB with a +/-8.6% margin of error.)

Knowing time is money, this can be a big help to employers hit hard by the pandemic and the resulting "Great Resignation."

A win-win for employers and their employees

The Labor Department September 2021 jobs report shares that the number of employees leaving the job market jumped to 4.4 million (the highest on record since December 2000, and up from 4 million in July). With so many employees moving from job to job, or dropping out of the workforce completely, employers are no doubt concerned about employee loyalty. Offering holistic retirement benefits and working with a single recordkeeper may be able to help there, too.

Our surveyed employers listed increased loyalty and retention as one of the top-three ranked benefits, in having their retirement plans with one provider. Looking at our own Principal® block of business reporting for year-end 2019 and 2020, we see that when new employees with multiple retirement plans experience the benefits of a single recordkeeper, they stay 25% longer.

With access to more efficient processes, employers working with single recordkeepers can spend less time on their benefits and can offer employees an integrated experience that can contribute to higher satisfaction—and potentially better retirement outcomes. It feels like a simple change, but it's one that can have lasting and positive impacts on our workforce.

Renee Schaaf is President, Retirement and Income Solutions at Principal. Click here for additional insights on maneuvering the multi-plan landscape and to learn more about the potential advantages that working with a single recordkeeper can bring.

This article is printed at the BenefitsPRO site with permission from Principal.

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