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Retirement

The challenge of being remote for plan sponsors and participants

Illustration of a person on a rock looking at a laptop computer

next issue no. 8: Participant engagement

The pandemic has been a stressful period for plan participants and plan sponsors alike. Particularly jarring was the sudden end to the traditional office environment, with many of us moving to a work-from-home environment incredibly quickly sometime in March 2020. This has resulted in a more challenging workplace environment from an efficiency angle, as meetings, workflows and productivity has shifted to remote offices, Zoom calls with wandering cats and spouses and unmuted mics. There is growing awareness that employees have been under a particular period of stress lately.

A recent study from TIAA highlighted some of the difficulties people faced during the pandemic, and the overall encroachment of digital into our lives. The study found that half of Americans spend less than one hour a week on their finances, while spending more than four hours on social media. The study also found that the pandemic has significantly impacted Americans’ financial wellness and financial habits, with one in three stating that their household finances have been negatively affected and over 40% feeling as though they need to manage their finances more closely.

Corporate culture has been one area that has suffered. There have also been struggles to onboard new employees, and engage current employees from a benefits and retirement planning perspective. Broad engagement had to shift from in-person meetings to remote and digital, without much time given to manage the transition. In fact, 2/3 of employees report having one foot out of the door, stating they are likely to job hunt in 2022. Further, 72% of employees would be attracted to another firm if they saw that it cared more about their financial well-being.

Plan sponsors have begun thinking about their retirement benefits as a strategic way to help attract, retain and engage their employees in an effort to improve their overall culture. Helping participants meet their financial goals in a time efficient manner should be a priority.

There is also an emotional and mental wellbeing element that cannot be ignored. There is an extent to which we need to start utilizing new messaging and language that includes a nod to mental resiliency, while tying that back to retirement planning and financial management. Providing encompassing messaging on emotional and mental wellbeing will help to let employees know that what they are experiencing is human and normal. Everyone’s life has been in a period of extreme flux and stress since March 2020. Keeping one eye on shortages at the grocery store has become a point of emotional stress, let alone planning decades into the future to keep an eye on retirement planning

63% of employees say that their financial stress has increased since the start of the pandemic.1

That stress has led to an upheaval of the conversations around financial planning, access and knowledge of benefits and overall mental and financial health. The impact of the pandemic on how employees interact with their firms has been profound, and there are more questions than ever from employees on what their firms can do to help, both longer-term and in the very immediate term.

What can plan sponsors do?

Plan sponsors know their employees have had a lot to deal with and focusing on the long term has been a challenge for the last couple of years. Below is a list of actions plan sponsors can take to help employees refocus on retirement.

Many are well known, but worth restating:

These steps help alleviate the stress of engaging with retirement planning from employees at a time when they are already focused on multiple other aspects of their lives.

One way to focus the engagement with employees in this new era is to absolutely maximize the use of technology. Digital tools have come to the forefront of engagement over the last couple of years, to the detriment of in-person events.

There are a range of ways to engage with participants that have been utilized over recent months that make use of digital engagement technology. Webinars examining the link between the pandemic and market volatility, and reassuring investors that focusing on the long-term and managing through volatility is one way to engage and educate. Virtual financial counseling and benefits fairs should also be encouraged, which allows for either broader-reaching or more personal attention to financial matters. These methods again encourage participants to engage on matters of financial planning, while not adding to already elevated burdens.

However, we do know that some participants are checking their balances, adding to contributions and using available tools to help visualize their income in retirement. These participants are using available tools, such as income calculators, to try to figure out what they’ll have in retirement.

While there is definitely a drive to get back to being in-person, many offerings should be shifted to a digital delivery to allow for greater participation and replayability. Since the pandemic began the use of videos has exponentially grown as a way to engage employees. Studies indicate that video conversations with advisors can be very effective since employees engage more when there is a visual component to interactions. Webinars are also another educational and interactive tool that are available. Long-term there is a pattern that will drive many in-person meetings again, once that is possible. In the meantime we find ourselves in a hybrid state of in-person and digital, but our focus has to be on providing the best tools to plan participants.

In this issue
Retirement Securing income through retirement
As employers continue to navigate the great recession and subsequent war for talent, understand how retirement can be viewed as a continuous income.
Retirement What to watch for in the DOL’s upcoming ESG ruling
Understand what the US Department of Labor's newly proposed ESG ruling entails, and how this impacts plan participants options within retirement planning.
Retirement Will cryptocurrencies make the cut in a retirement plan?
Understand how Cryptocurrencies such as bitcoin are being introduced into retirement plans, as we explore what role crypto can play in an investment portfolio.

Endnotes

1 Source: PwC’s 10th annual Employee Financial Wellness Survey, PwC US, 2021

The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This material may contain “forward-looking” information that is not purely historical in nature. 

Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions that may have been made in preparing this material could have a material impact on the information presented herein by way of example. Past performance is no guarantee of future results. Investing involves risk; principal loss is possible. 

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. For term definitions and index descriptions, please access the glossary on nuveen.com. Please note, it is not possible to invest directly in an index. 

A word on risk 

All investments carry a certain degree of risk and there is no assurance that an investment will provide positive performance over any period of time. Equity investing involves risk. Investments are also subject to political, currency and regulatory risks. These risks may be magnified in emerging markets. Diversification is a technique to help reduce risk. There is no guarantee that diversification will protect against a loss of income.

Please note that this information should not replace a client’s consultation with a tax professional regarding their tax situation. Nuveen is not a tax advisor. Clients should consult their professional advisors before making any tax or investment decisions.

Nuveen provides investment advisory services through its investment specialists.

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