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How To Boost Retirement Readiness In An Automated World

The industry is rolling out newer, flashier innovations — from robo-advising platforms to smart speakers that provide account balance updates — that many plan sponsors think could be the solution that helps their workforce get on track for retirement.

Although clients may be wowed by flashy technology, it probably isn’t creating better participant outcomes or helping employers create better plans. In contrast, managed services can provide a balance between technology and tailored support for better outcomes for employees and better plans for employers.


Going Beyond A Smart Speaker

Today’s managed services are more than set-it-and-forget-it retirement accounts. Many address the needs of individual participants, considering their risk tolerance, personal savings goals, retirement timeline and projected retirement income needs. These services can paint a holistic picture for each employee by building a plan around their unique situation. Consider these five key ways a managed service can help your client’s plan participants get on track for retirement:


1. Create personalized savings and investment plans. Some managed services allow plan participants to have as much — or as little — of a role in customizing their savings strategy as they would like. For some participants, it’s important to be in the mix of choosing their preferred investment options and determining how their money is invested. For others, a more hands-off approach may be preferred, leaving the investing and decision making in the hands of experts who will select appropriate investment options.


Regardless of the approach, managed services can implement a specific investment strategy based on goals, investment styles and life stages.


2. Provide a view of the bigger picture. A comprehensive retirement strategy is most successful when all the pieces of the financial puzzle are accounted for. Whereas target date funds take into account only a participant’s estimated retirement date, some managed services provide a complete picture of a plan participant’s situation, including other retirement savings accounts like an individual retirement account or their spouse’s assets. This makes the plan more concrete and can result in better recommendations to help keep an employee on track for retirement.


3. Incorporate automatic contribution increases to help meet retirement income goals. Many employees are behind in making contributions to meet their retirement goals. Other employees are unaware of the need to increase their retirement contributions to meet their goals. Some managed services can help boost contributions with annual automatic deferral rate increases. For most workers, this is just a 1 percent increase. But that additional increase each year can make the difference in making a specific retirement goal a reality.


4. Monitor portfolios and adjust funds as necessary. Managed services will regularly review each portfolio to ensure a participant is on track for retirement. To help meet retirement goals, managed services may rebalance investments or swap out investment options to ensure a portfolio is performing in the participant’s best interest.


5. Provide access to dedicated support. Although a worker’s contribution amounts, investment options and balance updates are all available at the click of a mouse, there are some questions that are better addressed offline. When a plan participant wants to better understand their plan’s performance or is curious about changing their asset allocation, some managed services have a team of dedicated and licensed advisor representatives available. This human interaction can serve as an important resource for participants who prefer to talk about their options instead of access information online.


Moving The Needle

The ability to create better participant outcomes is a crucial concern for today’s plan sponsors. Because of that, your role in incorporating proven solutions to move the needle for plan participants is key. Positioning managed services that keep everyone on track can help plan sponsors and participants rest easy in knowing they’re on the right path toward a secure retirement.


Ken Waineo is the senior director of business development and sales operations at The Standard. Ken may be contacted at [email protected]

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