To assess plan health, comprehensive Annual Plan Reviews continue to be of value, and plan providers are developing more concise versions of the report — offered on paper or online. According to the Lincoln Financial Group study, You are here: Understanding financial wellness, retirement readiness and plan health , plan sponsors use plan health data to get quick, timely updates on employee retirement preparedness levels and to help meet their goals by leveraging data to make informed plan design decisions. Next steps for plan sponsors Review year-over-year trends to identify patterns and opportunities. Compare your plan by industry, asset size, and number of participants to set competitive goals. Work with your provider to optimize participant data to help limit assumptions and provide more accurate reporting. Continue to monitor traditional success measures — balances, contribution rates and diversification — while adding new metrics, such as income replacement rates. Work with your p...

In the Lincoln Financial Group study, You are here: Understanding financial wellness, retirement readiness and plan health, plan providers agree that retirement readiness is unique to each individual. A single, accurate income replacement rate does not completely define retirement readiness. Yet, replacement rate is the one measure that seems to be gaining momentum among plan sponsors. Whether plan participants need between 70% and 85% of pre-retirement income, or whether they plan to retire at age 62, 65, 67 or older, plan sponsors are unanimous in the belief that translating assets to potential income is critical. Take action on retirement readiness: Work with your recordkeeper, plan advisors and consultants to generate greater employee engagement, and seek an approach that makes it easy for participants to take action. Ask for employee communications to demonstrate the benefits and impacts of measured, realistic, small steps and to promote content that’s neither simplistic nor cond...

In the Lincoln Financial Group study, You are here: Understanding financial wellness, retirement readiness and plan health , plan sponsors reported that employees need financial education, and they believe instituting a financial wellness program leads to improved job performance and increased employee loyalty. The industry defines “financial wellness” as a program of financial topics delivered through multiple channels to help people minimize their financial challenges. Financial wellness is aspirational, and the path to wellness for participants involves setting reasonable goals and taking positive steps forward. As financial wellness programs become more prevalent and significant over the next few years, we anticipate closer alignment with health and wellness programs. New service providers and program opportunities are rapidly emerging. Best practice considerations: Talk with your retirement plan provider, advisor or consultant about available financial wellness resources. Survey p...

In the study, You are here: Understanding financial wellness, retirement readiness and plan health , the Lincoln Financial Group explored three emerging trends in retirement plan administration. Financial wellness programs . Similar to health wellness programs, financial wellness programs can be adopted by a plan sponsor to improve an individual’s financial health so he or she can accomplish specific financial goals, such as saving amounts sufficient for retirement. In many cases, low participation and savings rates in retirement plans are the results of an inability to save due to financial challenges, such as poor budgeting and credit card debt. Retirement readiness communications. Retirement readiness communications are designed to help participants understand how much income they may need to achieve their retirement goals, whether their savings are on track, and how any shortfalls can be addressed. For plan sponsors, retirement readiness indicators provide an opportunity to monitor...