As employers focused on workforce reductions and ways to get the work done remotely, setting priorities for the 401(k) plan may have been low on the to-do list. But as things begin to normalize, it might be time to push that goal setting back toward the top of the list.
As plan sponsors figure out their plan priorities for 2021, says Mercer in a new report, they should give some thought to their participants’ values. In their “Reinventing retirement. Defined Contribution plans 2021” priorities report, the international consulting firm says 2020 revealed the critical importance of focusing on employees and what they need, want and expect.
Mercer suggests starting by reviewing participant demographics and key behaviors across the benefit programs, with an eye toward the financial pressures experienced during the pandemic. Using the information gathered, it may be easier to understand subsets of employees, and what they value and need from their employer.
Another suggested priority in Mercer’s report is to expand the way plan sponsors think about defined contribution plans. Doing so could benefit participants at every stage. Of course, these plans are a long-term savings vehicle and designed for that purpose. But the last year revealed a critical lack of overall financial wellness, suggesting the need for assistance with emergency savings. For participants closer to retirement, having a regular monthly income from the plan, similar to a pension, would also be helpful.
Mercer’s 2021 report discusses four more items they believe will take on great importance in the next year. You can read it here: https://www.mercer.us/content/dam/mercer/attachments/private/us-2020-defined-contribution-top-priorities-in-2021.pdf
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Heartland Retirement Plan Services are offered through Dubuque Bank and Trust Company. The information provided herein is general in nature and is not intended to be nor should be construed as specific investment, legal or tax advice. The factual information has been obtained from sources believed to be reliable, but is not guaranteed as to accuracy or completeness. Heartland Retirement Plan Services makes no warranties with regard to the information or results obtained by its use and disclaims any liability arising out of your use of, or reliance on, it. Products offered through Heartland Retirement Plan Services are not FDIC insured, are not bank guaranteed and may lose value, unless otherwise noted.
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© 2020 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance, nor as the sole authority on any regulation, law, or ruling as it applies to a specific plan or situation. Plan sponsors should always consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.