The Markets February 16, 2012

Increasing 403(b) Plan Participation in the K-12 Market

Working together to increase K-12 employee participation in 403(b) plans can produce benefits for advisers, school districts and employees alike.
Reported by

Charles M. Riharb, PlanMember Securities Corporation, explained to attendees at the National Tax Sheltered Accounts Association’s (NTSAA) 403(b) Advisor Summit that K-12 employees are so far behind in saving for retirement because there is not a “culture of savings” in schools.  School districts lack human resources personnel to focus on this, employees are in multiple working sites, there is a lack of education, and ease of enrollment and government plans are not subject to the same participation requirements as corporate plans.  

In addition, Riharb explained, employees have other financial concerns such as debt, costs for children’s college education and mortgages. 

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Utilizing a financial adviser can make a difference; Riharb said research shows employees spending some time one-on-one with a financial adviser saved more than twice the amount as those reporting no time.  The gap triples for those reporting a lot of time spent with an adviser. 

The solution to getting employees to participate in their retirement plans is to provide financial literacy, an educational curriculum about retirement plans and promoting a strong benefit program, according to Riharb.   

Employers can: 

  • provide a website to promote benefit plans, 
  • e-mail employees to encourage participation, 
  • offer frequent Benefit Fairs in multiple locations, 
  • provide regular educational workshops from multiple vendors, and  
  • hold open enrollment meetings. 

 

Riharb said advisers can work with employers to design an education curriculum that promotes a consistent message to all employees and is broken into several meetings on specific topics, rather than one meeting with a large amount of information.  Employers should also offer onsite assistance and support.  

According to Riharb, such an education curriculum will result in increased 403(b) participation rates, financially-fit employees who are more productive and focused, employees who are able to retire early or at normal retirement age and improved appreciation by employees of the school district and its benefit package.  

Along with the benefits to the K-12 plan sponsor, greater 403(b) participation can help employees achieve their retirement income goals and potentially increase revenue for plan advisers.

Data & Research February 16, 2012

Survey Finds Retirement May Be a Thing of the Past

A survey shows 57% of workers age 60-plus said they will look for a new job after retiring from their current company.
Reported by

CareerBuilder asked workers how soon they think they can retire from their current job; one in 10 (11%) respondents said they don’t think they’ll ever be able to retire.

Other responses included:

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•  1-2 years – 26%;

•  3-4 years – 23%;

•  5-6 years – 22%;

•  7-8 years – 7%;

•  9-10 years – 7%; and

•  More than 10 years – 4%.

According to the survey, 43% of employers plan to hire workers age 50-plus this year, while 41% said they hired workers age 50-plus in 2011. Seventy-five percent of the employers surveyed would consider an application from an overqualified worker who is 50-plus, with 59% of those employers saying it’s because mature candidates bring a wealth of knowledge to an organization and can mentor others.

The survey was conducted online within the U.S. by Harris Interactive on behalf of CareerBuilder among 3,023 hiring managers and human resource professionals ages 18-plus, and 878 U.S. workers ages 60-plus (employed full-time, not self-employed, non-government) between November 9 and December 5, 2011.

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