Plan sponsors need to take action: when workers elect workplace benefits during open enrollment, less than half will review or increase retirement plan contributions
Employers may be missing the opportunity to help their employees prepare for retirement, especially during an open enrollment period.
Before a new plan year starts, some employers give employees the chance to review and make changes to their benefits selections for the new plan year. For example, they might give employees from March 1 - March 15 to make changes before a new plan year starts on May 1. This is known as an open enrollment period.
The overwhelming majority of workers (87 percent) believe it’s a good idea to review their retirement savings plan while selecting other workplace benefits during their company’s open enrollment period, but just 44 percent say they will review how much they contribute to their retirement plan, says a survey by Corebridge Financial and Morning Consult. Additionally, only 34 percent expect to review their employer’s contribution and only 31 percent plan to evaluate whether they are on track to meet their retirement goals.
With just four out of 10 (41 percent) respondents saying that their retirement outlook has improved since this time last year, there is a clear opportunity to take action during option enrollment.
Support employees to prepare for retirement
Employers can help workers at this time by communicating the benefits of preparing for retirement. Employees should:
- Consider increasing their retirement plan contribution, even by a small amount – less than half (45 percent) of those surveyed intend to increase their retirement plan contribution by one percent or more.
- Ensure they’re enrolled in the employer-sponsored retirement plan, if eligible – 32 percent of respondents say they will be enrolling in their company’s defined contribution plan, with 35 percent already enrolled.
- Meet with a financial professional – nearly eight out of 10 (78 percent) believe it’s a good idea to meet with a financial professional when selecting workplace benefits; a sentiment that increases among younger generations.
“The benefits available through the workplace can play a major role in retirement planning – from helping you accumulate and protect retirement savings to ensuring your loved ones are taken care of later in life,” says Terri Fiedler, president of retirement services at Corebridge Financial. “Your employer’s open enrollment period is an opportune time to review your retirement plan holistically, identify gaps and needs, ensure you’re maximizing your employer’s contribution matching programs, and take actions that will help achieve the retirement you envision.”
The survey finds women (33 percent) were significantly less likely to say their retirement outlook has improved heading into this workplace enrollment season compared to men (48 percent). Generationally, Millennials were most likely to say their outlook has improved with more than half (51 percent) feeling good about retirement.
Among those who do not intend to review or make any changes to their employer-sponsored retirement plan during the workplace open enrollment period, the most cite the reason is that they haven’t thought about it (27 percent). This represents an opportunity for employers and financial professionals to consistently educate and engage employees and clients on workplace retirement benefits. It is also an opportunity for individuals to ensure they are taking advantage of the retirement resources available to them through their employer, which may
