The era of employee-funded retirement began decades ago with the rise of 401(k) plans. Ever since, employers and service providers have been looking for ways to increase participant savings rates within these plans. Research conducted by Empower sheds light on a key to making this happen.
The study found that "engaged 401(k) plan participants are saving at significantly higher rates than that of unengaged participants, demonstrating that getting people involved in their retirement planning is a key component of driving better outcomes."
One way to engage participants is to provide them with access to in-person advice. Yet, not all plan advisors are equipped to deliver advice to all the participants within the plans they advise. Here's where fiduciary support from the plan's recordkeeper can be invaluable.
While partnering with recordkeepers capable of participant-level advice, plan advisors can selectively choose which participants for whom they are best suited to provide advice. The recordkeeper's advice program is an ideal solution for the remaining participants – usually those with smaller account balances or less complex questions.
Fiduciary services such as participant advice are integral to engaging participants, boosting savings rates, and helping them invest wisely. By partnering with the right recordkeepers, plan advisors can enhance the quality and efficiency of these services, benefiting all involved parties.
Finsum: An Empower study shows that engaged 401(k) plan participants save at a higher rate than unengaged participants underscoring the importance of finding ways to get involved in their retirement planning.