TIAA released its 2022 Retirement Insights Survey last week, and among the findings are clear signs that employers need to remain focused on the fundamentals of quality retirement plan communications.
While they say important gains have been made, employers remain concerned about employees not knowing enough about financial topics and not making the most of their company’s retirement plans. TIAA’s data shows 56% of employers cited this worry in 2020, and the number has since increased to 61%.
Relatedly, the TIAA research shows only 44% of employees are currently receiving financial advice. Of this group, the majority—or 31% of the total respondent population—found an adviser on their own, compared with the 13% of the respondent population that were linked to their current adviser by their employer.
Those employees who are more likely to say they have manageable debt levels are overrepresented among participants who say they work with an adviser, own annuities and feel they understand their employer’s retirement plan well. According to TIAA, those who understand their plan well are also more likely to say retirement savings are a current goal.
When it comes to the lingering impacts of the COVID-19 pandemic, the TIAA data shows some clear effects. A nearly two-thirds majority say the pandemic has either significantly or marginally increased their overall level of stress. At the same time, 56% of employees surveyed say they now appreciate their company’s health insurance benefits either significantly or marginally more than they did prior to the pandemic’s onset. On the other hand, only 48% say the same about their employer’s retirement plan.
According to the survey, knowledge among both employers and employees regarding the requirements and opportunities stemming from the passage of the Setting Every Community Up for Retirement Enhancement Act in late 2019 has decreased over the past two years. In the latest survey, 38% of the total survey respondents say they are extremely or very knowledgeable about the SECURE Act, which is down from 50% in 2020. Fewer say they are extremely or very familiar with the legislation’s lifetime income disclosure requirements, and the same is true when it comes to the law’s provisions requiring greater portability of in-plan annuity products.
Much of the survey data speaks to the evolving levels of interest voiced by employers and employees about in-plan guaranteed lifetime income products. Among employees not interested in an in-plan GLI annuity, cost is the top reason cited. According to TIAA, employers recognize this dynamic, and they often see products’ complexity as a major challenge preventing broader adoption of GLI solutions. Generally speaking, employees see such products as being more pricey, more confusing and more restrictive than employers do—perceptions that highlight the opportunity for targeted education and communication efforts. TIAA says employers will need to emphasize the lower costs of these options in-plan versus outside of their plan to appeal to employees.
Employers can also consider including more targeted and nuanced information alongside mandatory income projections. According to the survey, almost two-thirds of employers think income disclosure will increase employees’ GLI interest. Case in point: over seven in 10 employees have received a retirement income projection and say it is helpful.