Eric Reihardt, of the Business Journal, concludes that employers could do more to help employees prepare for retirement after reviewing the findings of a 2009 survey conducted by Wells Fargo & Co.
Private-sector employees in the U.S. are transitioning from earning a pension for life to managing their own retirement. The question is, just how involved should you be in preparing your employees for retirement?
The main reason a large number of employers offer a retirement plan has less to do with setting their employees up for a financially sound retirement and more about providing “competitive benefits to attract and retain employees.” As a result, employers themselves still consider retirement plans a benefit rather than the primary means employees can support themselves once they retire.
But it goes both ways. Clearly, there are many employees who are not giving much thought to their retirement. According to Matthew Monroe in the DeWitt office of Wells Fargo Advisors, an “effective defined-contribution plan requires effort on the part of the employees, too.”
So what can you do? Monroe would like to see employers more proactively educate their employees on financial matters. He is optimistic that a responsible employee will respond to this type of training and take advantage of a company retirement plan.
Monroe warns that “the biggest risk is not contributing.” Of course, “the second biggest risk is not contributing enough.”
As a manager, as long as you are proactively making financial education available to your employees you’re doing your part to support the workplace shift from pensions to individually managed retirements. Whether or not your employees take advantage of the programs available to them is still up to them.