Survey Finds Tangible Business Benefits For CFOs From Partnering With Retirement Plan Advisor

East Granby, CT –June 14, 2017 – Employers that sponsor retirement savings plans are better able to control future labor costs by partnering with a knowledgeable financial advisor, according to a new study commissioned by the Retirement Advisor Council.

The study finds that working with an advisor who is rated as “outstanding” provides key financial benefits in high demand by chief financial officers (CFOs). Specifically, the findings show that employers that partner with an “outstanding” advisor sponsor more effective retirement plans that can better help prepare employees for retirement, thereby helping reduce salary and benefits costs related to workers remaining on the job past normal retirement age.

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

Key findings:

  • Median employee age is 35 today; but five years from now, the median age of employees at firms partnering with an outstanding advisor will be age 36, compared to age 38.5 at other organizations;
  • Outstanding plan advisors are pro-active in taking immediate steps to contain workforce aging;
  • Outstanding plan advisors encourage plan committees to discuss workforce aging;
  • Three-quarters of client plans of outstanding advisors have precisely quantified the adverse financial impact of uncontained workforce aging;
  • Outstanding plan advisors help many employers alter the benefits budget allocation to health benefits;
  • Where appropriate, they encourage CFO and HRO joint leadership of the plan committee;
  • Outstanding plan advisors promote plan design changes and the monitoring of retirement readiness scores to help set employees on a track to retirement success;
  • More than 35% of clients of outstanding advisors have seen average employee contribution rates increase by 4% to 6% or more.

An executive summary of research findings is posted at: www.retirementadvisor.us/research

We are very fortunate to work with CFO’s and engaged Plan Committees that understand that having a successful retirement plan is not only critical for their valuable employees, but it is also essential for the long term financial health for the organization as a whole. When we are engaged by a new client to improve their retirement plan and the outcomes for their employees, we honestly believe that in doing so we are ultimately improving the financial results of the company. That is a great feeling and makes our work very rewarding for our entire Team." says Chad J. Larsen, AIF®, PRP® of MRP.

The survey asked 401 plan sponsors to compare outcomes for plan sponsors who rely on a professional retirement plan advisor rated as “outstanding,” with a benchmark for other plan sponsors. The survey questionnaire addressed key functions that advisors perform that would prompt their clients to rate them as “outstanding.”

Employees hired during the downturn are now requesting changes and improvements to their compensation packages. While the interest in quality benefits covers several categories, retirement benefit plans are becoming an increasingly important part of the mix. Going beyond retirement plans, we have been strong advocates of financial wellness benefits with our clients. Many employers want to create a culture where employee well-being (health wellness + financial wellness) is an important component to the company’s identity. No matter the initial reason, the program will potentially have greater impact in partnership with an advisor." says Michael M. Kane, CLU®, ChFC®, AIFA®, CBFA™ of Plan Sponsor Consultants.

In addition, this third edition of the study focused on plan sponsor 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 in terms of healthcare and worker’s compensation expenses.

About the Retirement Advisor Council

The Retirement Advisor Council is a national organization that advocates for successful qualified plan and participant retirement outcomes through the collaborative efforts of experienced, qualified retirement plan advisors, investment managers and defined contribution plan service providers.  To advance its mission, the Council undertakes initiatives in the areas of research, public relations and promotion, general public education, regulatory positions and practice management.  The Council accomplishes this mission by:

  • Identifying duties, responsibilities, and attributes of the Professional Retirement Plan Advisor.
  • Sharing professional standards with plan sponsors who are responsible for the success of their plans.
  • Providing collective thought capital to decision makers, product providers, legislators and the public.
  • Giving voice to the retirement plan advisor community
  • Offering tools to evaluate advisors to ensure the quality of services provided.

Learn more about the Retirement Advisor Council at www.retirementadvisor.us

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