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Time to read: 4 minutes

Key takeaways

• Turn your retirement plan into a talent magnet by adding lifetime income options and personal guidance. You’ll demonstrate a real investment in people's futures.
• It’s possible to lessen the sting of faculty retirement talks by offering ways to ease into a form of emeritus status—show faculty how their role can evolve rather than end.
• You can help close the gender savings gap through stronger retirement plan auto features, one-on-one advice and real-life stories from women who've been there.

How retirement connects to a bigger employee benefits picture.

Employers told us in a recent survey they want to optimize their retirement plans to help employees feel financially ready for retirement. But these plans can do so much more: When the benefits strategy combines retirement with compensation and advancement, it makes the total rewards story even more compelling to employees. Making these connections isn’t easy but outside perspective can help. So we asked some consultants for their ideas.

Tom Heuer, CFA
Vice President, NFP–an Aon Company

It’s true that in today’s competitive job market, a retirement plan can be a strategic tool for recruiting and retaining top talent—when it gives employees the financial security they want. In return, they’re more likely to be engaged, loyal and productive, as research shows.

One of the most effective ways to enhance the plan and give employees the long-term financial security they want is by adding lifetime income. We’re starting to see a wide range of income options enter the marketplace—including many custom solutions that integrate guaranteed, lifetime income right into the plan’s easy-to-use default investment option. Surprisingly, “custom” doesn’t necessarily mean more expensive, and many of the custom solutions available today are less costly than the plan’s existing default option, typically an off-the-shelf (i.e., not custom) target-date fund.

But simply adding lifetime income won’t help recruit and retain high-potential employees if they don’t understand why it matters. Employers need to educate employees as to how the plan can improve their financial well-being and security now and in the long run. Group education can work, but one-on-one advice is far and away more effective. A one-on-one meeting can make the plan relevant on a personal level, helping employees connect the plan to their financial goals while garnering employers the recognition they deserve for offering an exceptional plan.

Matt Cellini
Partner and Practice Lead, Greenspring Advisors

Over time, we’ve come to realize we can’t fix the gender savings gap simply by doling out financial education. In reality, women face different circumstances than men that require more thoughtful, tailored approaches.

First, start by giving women access to real help. Years ago, we delivered retirement education in large groups and women rarely asked questions. Some felt too far behind; others worried how their colleagues would perceive their questions. Offering individual sessions with a salaried CERTIFIED FINANCIAL PLANNER^®—someone with no intention of selling a product—has been the key. Women get a safe, judgment-free zone to get the help they need.

Next, make saving not only automatic but aggressive. Research shows women disproportionally take time off during prime saving years. When they come back to work, they need to make up for lost saving time fast. Automatic enrollment can get them started right away, but a 3% contribution isn’t enough. Instead, enroll at 6% plus annual 1% increases up to 15%. It sounds aggressive, but the opt-out rates aren't significantly higher and male employees can benefit, too.

Last, let’s make our communications as human as we can. Women enter and leave the workforce for many reasons that are quite different from men. Ask women to share their stories on how they navigated similar challenges while also managing to build their retirement savings and overall financial well-being.

The ultimate goal is to create an environment where women feel seen, understood and supported in moving toward a dignified retirement. When we do that, positive results will follow.