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Survey Finds Tangible Benefits for CFOs Partnering with Plan Advisors

A recent report by the Retirement Advisor Council (RAC) suggests that CFOs who partner with a retirement plan advisor rated as “outstanding” are better able to control future labor costs, spend less time administering their retirement plan and more time running the organization, thus easing the burden of the plan sponsor and improving plan performance.

The report, “Financial Benefits for the Business: How Outstanding Retirement Plan Advisors Help CFOs Mitigate the Adverse Effects of Workforce Aging on Company Financials,” focuses on plan sponsors’ awareness of the adverse effects of workforce aging and how an aging workforce that is not ready to retire could ultimately prove costly to an organization.

RAC explains that employers that partner with a plan advisor take a broad range of actions beyond simply intensifying participant education that promotes retirement readiness. Strategies involve altering the retirement plan design, as well as implementing high-deductible health plans and health savings accounts. By contrast, the report contends that employers that do not partner with an advisor are more likely to turn to early retirement programs, perhaps because they are reluctant to reform benefits popular among job applicants and senior employees.

Workforce Aging

One way plan advisors help their clients achieve stronger business results is encouraging plan committees to discuss the subject of workforce aging. More than three quarters of employers that partner with a plan advisor have quantified the potential liabilities associated with workforce aging at their firm, putting those employers in a better position to address labor costs and increase profitability, the report notes.

In addition, reducing the portion of the employer benefits budget allocated to health benefits and increasing the dollar contribution to the retirement plan can alter the demographics of the employee population without employee termination, the report advises.

Plan Design Action Steps

RAC further emphasizes that plan design changes can be more effective than any amount of participant counseling and education at changing participant behavior. Implementating automatic enrollment at a high deferral rate and automatic annual deferral increases that drive deferrals over 10% are two changes many employers consider, the report notes.

The report details a number of action steps that can help mitigate workforce aging when making financial decisions for the business, including:


  • changing allocation of benefits budget to counteract adverse self-selection in recruiting and employee retention;

  • designing retirement benefits program to reduce the need for early-retirement programs;

  • playing an active role in the retirement plan committee, where fiduciary rules allow; and

  • supporting plan features that set employees on a track to achieve a successful retirement by automatically enrolling all employees, automatically increasing contribution levels, adopting appropriate QDIA elections, and monitoring retirement readiness and financial wellness of employee population.


The report was based on survey results of 401 key decision makers for plans with $5 million to $500 million in plan assets and 100 or more employees conducted online Dec. 16-30, 2016. Funding and research oversight were provided by John Hancock Investments, MassMutual, MFS Investment Management, Principal Financial Group, and Transamerica Retirement Solutions.

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