Employers: Making the Difference in Retirement Savings

Every year around this time, I’m reminded to take a closer look at my retirement account balance and to either smile and breathe a sigh of relief or cringe and increase my monthly contribution.  

Next Monday begins the annual America Saves Week; a week dedicated to promoting the benefits of personal savings. And one of the most important types of savings you can have is a retirement account.

Chances are your employer provides you the opportunity to save for retirement through an employer-sponsored retirement plan.  According to SHRM’s 2015 Employee Benefits Report, 90% of those surveyed offered a defined contribution retirement plan (think 401(k) or 403(b)) and 73% matched their employees’ contributions in some way. 

The awesome thing is - these plans work! They provide employees the opportunity to save, reduce their taxable income and in most cases, not even notice the amount missing from their paychecks. In 2013 (the most recent year figures are available), the Department of Labor (DOL) reported that there were 681,154 private sector retirement plans covering 131 million participants totaling $7.8 trillion bucks. That’s a lot of retirement savings!

Even with the accomplishments of the employer-based system, according to the 2015 Annual National Survey Assessing Household Savings, only 55% of respondents said that they are saving enough for retirement. 

Offering a plan is the first step, but what else can employers do to encourage retirement savings? Having the flexibility to gauge their workforce is key, and then determining what tools will work for their employees is what yields success.  Tools like automatic-enrollment, auto-escalation, employer-match and catch-up provisions for older employees are giving employers the ability to customize their plans, therefore encouraging their workforce to save more.

These retirement tools not only help to increase savings, but they help employers to retain and recruit top talent who are savvy when selecting their benefits plan.  So – if you’re an employer looking to incentivize savings, or an employee trying to decide what to save – knowledge is power. For employers, take a close look at your retirement options and evaluate your offerings. As an employee, utilize the tools provided by your plan – many offer retirement calculators and utilize sources like the DOL's Retirement Toolkit.

So, as you continue to keep an eye on your own retirement savings, keep in mind that the Congress or the Administration may try to make changes to retirement plans and the tax code over the next few years. Visit both SHRM’s Tax and Benefits website, as well as the SHRM-led Coalition to Protect Retirement for resources and information about this important policy issue and how your plan could be affected. 


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