If 85% of the market asks for something, you’d better provide it.
I know. Common sense, right? And yet, plan sponsors have, year in and year out, ignored what survey after survey of participants say they want.
And advisors—most of them, anyway—have been co-conspirators in this avoidance.
I’m referring, of course, to the subject of in-plan retirement income.
Now we know that while advisor-led wealth management programs can be an optimal solution for some, those likely aren’t cost-effective for most retirement savers (or the advisors that would deliver them). But perhaps most importantly—survey after survey—most recently Franklin Templeton’s Voice of the American Worker—tells us that vast majorities of American workers want an in-plan retirement income solution.
So—why aren’t they getting access to a plan feature so many express interest in? Why do so few plans offer those options, even today?
I know there are real issues and legitimate concerns about making this available: skepticism about portability, worry about long-term fiduciary liability, and questions about cost.
But, if we’re honest, we all know that individuals need help structuring retirement income and that most defined contribution plans (like 401(k)s) don’t currently include ANY periodic distribution mechanism, much less any kind of actual retirement income structure.
Sure, it matters that participants want the option. At a time when employee engagement is weak, employers are rightfully concerned and interested in providing benefits that strengthen and solidify the commitment of valuable workers. Particularly now—when so few employers offer that option in which so many express interest—it could be a powerful connection, a way of establishing themselves as a real employer of choice.
But more important than satisfying participant desires is their need for these options. Surveys consistently indicate that workers are looking to their employers for help.
And their employers, in turn, are looking to their advisors for insights and solutions.
You owe it to yourself—and those you serve—to know what is out there. Maybe it isn’t (yet) what they want- or what they think they want. But it’s something they need—and apparently know they need.
And if 85% of the market is asking for something …well, sooner or later, they will get it …from someone …
Just Sayin’
