Pandemic fatigue is a given. Now, it seems, many workers are experiencing decision making fatigue—and it follows them to work. Although surveys among retirement plan participants indicate a relatively high level of confidence related to savings, over half continue to worry about personal finances while on the clock.
Worrying On The Job
Reporting on a survey conducted by John Hancock, the National Association of Retirement Plan Sponsors (NAPA) notes that 66% of retirement plan participants say they worry about personal finances during the work week. Accordingly:
They want help in making money management decisions and are showing a desire for guidance and solutions as “pandemic fatigue” has evolved into “decision-making fatigue…” This represents a chance for employers, financial professionals and retirement providers to help retirement savers build a solid foundation for the future.
There’s a “clear opportunity” for employers to keep this momentum going by offering support to their employees. In fact, the opportunity for employers to help their workforce is a potential mitigating factor for the Great Resignation and a means to improve recruitment and retention, the report suggests. To that end, 89% of participants said it’s important for employers to offer financial wellness programs, and 66% said having access to financial wellness programs would make them more likely to stay with their employer. The value in employer-sponsored retirement plans is also broadly acknowledged, with almost all respondents stating that it’s a critical benefit, including 72% who said it’s “very critical.” What’s more, 80% of respondents said they wouldn’t be likely to work for a company that doesn’t offer a retirement plan.
Plan Sponsors and Decision Making Fatigue?
Of course plan sponsors are susceptible to decision making fatigue too. With long lists of regulations and responsibilities to attend to, plan sponsors across the country are turning to Colonial Surety for affordable, multi-year protection plans. Continuous coverage at locked in rates is the sensible decision. Just select an affordable, package and receive a three point coverage solution:
- The ERISA bond required to protect the assets of the retirement plan from theft.
- Fiduciary Liability Recovery to protect you and your assets from personal liability.
- Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach.
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Interesting Trends
As NAPA reports, coping with the pandemic has led some workers to new habits: “Uncertain economic times often cause people to adopt positive financial behaviors in the short term,” notes Sue Reibel, CEO of John Hancock Retirement. “This fact, combined with the unique situation of COVID-19 greatly reducing the opportunities to spend money, found many retirement savers in a stronger financial situation than they were pre-pandemic.”
Indeed, sharing highlights from the 2021 year-end, NAPA’s notes that the average 401k balance of older workers rose by over 20%. The balances of younger workers grew by about 33%, which was likely fueled by increased contributions.
With workers across the country maximizing the possibilities of employer sponsored 401(k) plans and focused on saving, plan sponsors are busy using participation rates, deferral rates and personalized rates of return to inform updated plan design and communication strategies. Auto-enrollment—with higher deferral rates–continues to be a best practice, as is the employer match. Given their significant fiduciary responsibilities, another important best practice for plan sponsors is protecting their personal assets with fiduciary liability insurance. With an annual premium that is less than the cost one hour with an expert ERISA lawyer if disaster strikes, Colonial provides affordable fiduciary liability insurance to plan sponsors.
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