Retirement plan sponsors would like their advisers to review their plans more frequently, and when they do, to focus more on what the sponsors consider important, according to research from MassMutual Retirement Services.
Fifty-seven percent of sponsors would like advisers to review their plans semiannually or more frequently, yet only 44% of advisers do so.
“Frequent, focused plan reviews are essential to assess the ongoing effectiveness of a retirement plan and to help ensure that plan participants are saving enough to retire when they reach their traditional retirement age,” says Tom Foster, spokesperson and practice management leader for MassMutual Retirement Services. “It’s a clear opportunity for financial advisers to improve and build their retirement plan practices.”
Plan reviews can lead to improvements such as new plan designs to better meet an employer’s objectives, Foster says. Any improvements to a plan should generally start with a careful review and include consultation with plan legal counsel and other experienced advisers, as appropriate, he adds. However, when reviews do take place, advisers and employers fail to focus on savings rates and retirement outlook, he says.
“Unfortunately, only one in four sponsors reviews its plan to determine whether employees are actually saving enough to retire,” Foster says. “This points to a missed opportunity on the part of both advisers and sponsors. We need to focus more on the effectiveness of the retirement plan and educational programs to help ensure that working Americans are saving enough to retire on their own terms.”
Greenwald & Associates polled 565 employers
that sponsor retirement plans for MassMutual.