You and your retirement plan professional

Una Morabito

By Una Morabito
Una Morabito is Head of Client Management for the Workplace Solutions unit of MassMutual.
Posted on Feb 5, 2020

Ralph Waldo Emerson, one of America’s foremost essayists and poets, once wrote that the purpose of life is to be useful. He could have been talking about a retirement plan relationship manager.

Although the 401(k) and other retirement savings plans weren’t invented for another 100 years after Emerson passed, his thoughts about humanity’s purpose and mission certainly apply to today’s retirement plans. Employers typically offer retirement plans to help their employees achieve long-term financial security. In that, employers are not only being useful, they are being helpful, kind and compassionate.

MassMutual supports this noble mission in part by fielding a nationwide network of retirement professionals whose primary function is to help employers and their employees make the most of their retirement plans. Large and mid-sized employers are supported by relationship managers who focus on the performance of the plan itself and coordinate with education specialists who interact with employees, providing retirement planning education and guidance. Smaller employers are served by client engagement managers who serve as a single point of contact for both managing the plan and educating employees.

But what should an employer expect from a relationship manager or engagement manager? What makes the relationship special? How can you get the most out of it?

For starters, employers should expect their relationship or engagement manager to meet with them at least annually and preferably more often to review the performance of their retirement plan. Important topics for discussion should include the direction for participation rates and contributions, whether employees in the aggregate are on target to retire at age 65 with at least 75 percent of their pre-retirement income, and the performance of investment options.

But any review should also include whether the plan is meeting the employer’s specific goals. If you don’t have goals, you should discuss establishing some to benchmark your plan’s progress.

A review is also a good time to red flag any potential issues and discuss ways to solve them. Are some more highly compensated plan participants having to return deferrals at year end, which could mean employees overall are not contributing enough to the plan? Do employees understand the purpose and advantages of their retirement plan or, more deeply, the purpose of saving for retirement? Are participants investing too conservatively or too aggressively to meet their goals?

If your retirement plan is not accomplishing its objectives, some changes may be in order. And that is where your retirement plan professional, working in tandem with your financial advisor, can be most useful.

A relationship manager or engagement manager can propose tactics and strategies to help fine tune your plan so it is running as effectively as possible. If participation is lower than you would like, for example, it may be time to conduct a re-enrollment and remind employees of their retirement benefits.

In some instances, retirement plan design changes may be necessary. Incorporating automatic features for contributions may help boost participation or even contributions. Offering educational sessions can also encourage employees to focus more on retirement savings.

Managing a retirement plan is process of continual improvement. As Emerson pointed out, life is an experiment. The more experiments, the better.

But other issues could be afoot. Employers are discovering that shorter-term financial issues often discourage employees from looking towards the future and, as such, contributing sufficiently to their retirement plan. High levels of consumer debt, lack of emergency savings, high medical expenses and others are causing financial anxiety for many workers, unnecessarily tamping down retirement savings. In some instances, employees are siphoning their retirement savings to address these shorter-term issues.

The 2019 MassMutual Workplace Financial Wellness Study probes the depth of the problem, finding that 79 percent of employers say their workers are struggling financially.1 Half of employers (51 percent) estimate that at least 25 percent or more of their workers struggle financially and 15 percent of employers say at least half of their workers are plagued by financial woes, the survey finds.

A retirement plan professional can help by working with you to establish a financial wellness program. Employers can provide tools and resources for employees to attack their shorter-term financial problems. Tools are available to assist employees to assess their overall financial wellness, prioritize financial needs and benefits, better manage budgets and debt, pay down tuition loans, and others.

By helping employees better manage their short-term financial issues, employers are ultimately assisting workers to more readily focus on longer-term financial security. And that can ultimately result in employees retiring on their own terms.

It all starts with your retirement plan professional. When hiring a relationship manager or client engagement manager, MassMutual looks first and foremost for customer service professionals who excel at building trusting relationships. We want people who have the passion and conviction to advance the conversation about making the most of retirement plans but also about enhancing employees’ financial wellness.

As Emerson pointed out, “you cannot do a kindness too soon, for you never know how soon it will be too late.” It’s especially so for tackling financial problems at the workplace.

Your retirement plan professional is your partner in all things at the workplace related to retirement and financial wellness. So have a conversation as soon as possible.

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12019 MassMutual Workplace Financial Wellness Study, Dec. 2019.