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4th Quarter 2002Executive SummariesFinancial Planning
Helping households make good investment decisions is a laudable public policy goal, yet there has been surprisingly little discussion of exactly how it can be achieved. This article explores how the “goodness” of investment advice might be assessed, arguing that it is a complex question requiring far more attention on the part of researchers, benefits providers and policy makers.
Although providing financial planning tools to defined contribution plan participants is more critical than ever for plan sponsors, plan sponsors often find themselves thwarted in their efforts to get employees to not only obtain advice but also to follow it. In this article, the author uses research findings to illustrate how plan sponsors can meet the needs of different groups within their 401(k) participant populations by implementing a multitiered approach that strikes a fine balance between structure and choice. Disconnects between what employees need and expect to receive during retirement and what employer-sponsored plans provide can create workforce issues with important implications. By creating a model that analyzes the spend-down phase of retirement, the authors provide a framework for better understanding what employees will need to save during their working lifetimes.
Frequently, an employer designates a benefits committee as its retirement plan administrator and named fiduciary. This article briefly discusses how to establish and operate a benefits committee, explains the fiduciary nature of the committee’s functions and provides a disciplined approach to meeting a benefit program’s business objectives.
“Enron” has become shorthand for a broad range of potential risks associated with defined contribution plans. The Enron situation may propel plan sponsors to examine their retirement plans from a risk management perspective and start taking employee financial planning more seriously. This article discusses an optimal program based on best practices for accomplishing this critical objective.
This article reports the results of the 12th annual wave of the Retirement Confidence Survey (RCS). Findings from the 2002 RCS underscore the tremendous need for financial planning and education that can lead to higher rates of saving. They also provide a means for employers to benchmark their own employee surveys and suggest approaches for targeted communications.
Due to rising college prices and the recent additional tax benefits afforded to 529 college savings plans, employers are receiving requests to assist employees with 529 plan recommendations and/or payroll arrangements. This article outlines an employer’s various choices in “providing” a 529 plan, highlights critical considerations for determining an employer’s level of desired involvement in doing so and provides sources for additional information to employers wishing to assist employees with their college savings needs.
Full text copies of these articles are available through the INFOSOURCE™ Document Delivery Service. Article reprints are also available in quantities of 100 or more. For information, call the Publications Department at (888) 33-IFEBP. You can order your subscription (reprints and back issues) online. Four issues for $100 (or $75 for CEBS registrants). |
