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7 ways to help position your clients for retirement success in 2022

Financial professional working with business-decision maker client to better prepare employees for retirement.

According to a recent Department of Labor (DOL) statistics report, 2021 saw more people leaving the job market than ever before. An average of roughly 4 to 4.5 million workers left their jobs each month throughout the year, topping the 2019 average of 3.5 million per month, and making Great Resignation a truly historic event.1

 

With the number of job openings currently at 10.6 million, employers are likely trying harder than ever to attract and retain talent.2 And workers may be more keenly aware of their worth—and looking for that “just right” job.

How can employers and workers find success in financial goals?

Working with a single recordkeeper can be a step in the right direction.

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An independent Principal® commissioned survey of multi-plan recordkeeping arrangements shows that working with a single retirement plan recordkeeper may help employers stay ahead of their competition, while also providing more effective plan benefits and support to their existing workforce. In today’s pandemic impacted economy and fight for talent, this can be a win-win for your employer and business decision maker clients, as well as their employees.

Working with a single recordkeeper can help your clients and their employees.

1.

Bolster trust and employee retention.

Surveyed employers listed increased loyalty and retention as one of the top-three ranked benefits in having their retirement plans with one service provider.3

Employees with multiple retirement plans stayed with their employer 25% longer when they experienced the benefits of a single recordkeeper.
60% of workers we surveyed agree if their employer offered financial wellness, it would increase their retirement readiness.

2.

Enjoy the benefits of financial wellness programs.

Additionally, the Principal Financial Well-Being IndexSM shows that 73% of plan sponsors on average think holistic, financial wellness programs help employees in key areas, like keeping them engaged and productive, decreasing stress over debt, and assisting with retirement preparation—essentially making it a key part of an employers’ benefit offering.6

3.

Be more engaged.

Roughly 73% of plan sponsors working with a single recordkeeper reported their employees are better engaged with all their retirement benefits, compared to approximately 62% of plan sponsors working with multiple recordkeepers. 

73% of plan sponsors working with a single recordkeeper reported employees are better engaged with retirement benefits compared to 62% plan sponsors working with multiple recordkeepers.

We’ve also seen our clients' participants be more engaged in saving for retirement when participating in a single-provider program. They contribute to a defined contribution plan six months sooner, have been 35% more likely to sign-in to their account, and 27% more likely to have their account invested in a diversified lineup. Diversification may be one of the most important ways to both help minimize risk and reach long-term financial goals.

4.

Develop more super savers.

Principal data shows that individuals participating in a single-provider program may save more. 
When reviewing our clients' participants in our total retirement solutions block of business data, we see a 77% higher number of super savers.
We've see employer-provided benefits rise over the past couple of years, with 90% of surveyed businesses planning to increase at least one benefit.

5.

Build better benefits.

Plan sponsors polled in a Principal® survey of multi-plan recordkeeping arrangements say their objectives for offering retirement benefits is largely to:

85%
attract new employees
81%
attract new employees

6.

Save time and money.

A Principal survey of multi-plan recordkeeping arrangements found that depending on the type of plans, employers with recordkeepers reduced their time spent managing their plans by 17-50% if switched to a single recordkeeper.

These findings demonstrate the value of working with a single recordkeeper for access to unique, end-to-end recordkeeping services. Employers with a single-service provider for their retirement plans revealed potentially significant time savings, features, and services—helping to streamline potentially duplicative processes and services to help make plan administration easier—and saving as many as 14 business days over the course of a single year.8

Additionally, when asked to rate the desired outcomes from offering multiple retirement plans, 73% of employers with a single recordkeeper noted “higher satisfaction with retirement plan benefits” in their top three, compared to just 60% of those working with multiple recordkeepers.

image of pie chart displaying 73% of employers with a single recordkeeper noted higher satisfaction with retirement plan benefits.
Over three-quarters of plan sponsors surveyed in our Principal Financial well-being index reported that financial wellness programs are important in helping reach long-term financial goals.

7.

Reach long-term financial goals.

Added bonus: Nearly as many plan sponsors also said financial wellness goals help employees better understand related/other employer-sponsored benefits.

Get insights to help you connect more closely with clients

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Discover how a holistic view of multiple retirement plans can help your existing or prospective clients. And be sure to contact your Principal® representative to find out how we can help your clients manage multiple retirement plans, or call 800-952-3343.

1,2 US Bureau of Labor Statistics; +431,000, November 2021.

3 Principal® commissioned survey of multi-plan recordkeeping arrangements, September 2021.

4 According to Principal® reporting for year-end 2019 and 2020.

5 Principal® Retirement Security Survey, June 2021.

6, 9 Principal Financial Well-Being IndexSM, Wave Two, August 2021.

7 Super savers are defined as having 90%+ of max annual contribution limit or 15%+ in deferral percentage.

8 Time savings ranges from 17% to 50% annually dependent upon plan combination; 50% or 14 days savings represents the plan combination of defined contribution and defined benefit working with a single recordkeeper. Margin of error: +/- 8.6%


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This information is educational only and provided with the understanding that Principal® is not rendering consulting, legal, accounting, investment or tax advice. You should consult with appropriate individuals including counsel, financial professional or other advisors on all matters pertaining to business, legal, tax, investment or accounting obligations and requirements.

 

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