Plan Sponsor

Employees in the HR and benefits departments handle many responsibilities, such as managing a company's health care benefits or supervising the retirement plan. As a result, it’s common for these employees to experience times of overwhelm, stress, and burnout. It is crucial for plan sponsors, who are frequently overseeing these teams, to understand the difficulties that HR and benefit departments encounter daily, and to avoid compromising their fiduciary duties to these workers.

According to ComPsych, the world’s largest provider of employee assistance programs, anxiety is the No. 1 presenting issue of employees seeking counseling, exceeding self-referrals for depression, stress, relationship issues, family issues, addiction and grief. The direct consequences of untreated anxiety impact both employees and employers alike.

A recent survey from market intelligence firm Cerulli Associates highlights a striking disparity in the financial wellness space. According to the report, U.S. Retirement End-Investor 2024, more than 90% of defined contribution recordkeepers provide financial wellness services and 71% of plan sponsors have adopted such programs. Yet at the same time actual engagement remains low, with usage rates for most resources below 20%. And while 41% of participants find their financial wellness resources “very helpful,” a majority (57%) express neutral sentiments.

A troubling trend has emerged in the retirement planning space: The “magic number” — or amount of money Americans believe they need to retire comfortably — has surged to an all-time high, even as actual retirement savings have declined. This growing disparity or “magic number gap,” highlights a significant and escalating challenge for both participants and plan sponsors. Northwestern Mutual’s 2024 Planning & Progress Study reveals that U.S. adults now believe they will need $1.46 million to retire comfortably, a 15% increase from the previous year’s target of $1.27 million and a jump that far exceeds the current rate of inflation.

A recent study commissioned by the ALI Retirement Income Institute has revealed a stark reality: A substantial portion of America’s Baby Boomer population is ill-prepared for retirement. As the retirement countdown begins for Peak Boomers, plan sponsors have an opportunity to implement impactful strategies that can help increase the financial security of employees entering their golden years.

A recent Gallup survey found that engagement at work has cratered among U.S. employees, with only 33% of workers were engaged in 2023. With engagement on the decline, that can mean decreased productivity, higher turnover, lower profitability, and a host of other problems for the organization. With this in mind, the company’s retirement plan can be leveraged as a powerful tool to help increase engagement and combat many of the negative sentiments among today’s workers.