Helping DC plan members with their retirement planning is difficult but also necessary, says Idan Shlesinger, managing partner, CAP services, with Morneau Shepell Ltd.
Because retirement planning is such an individualized process—the member must consider how his or her lifestyle, family responsibilities, financial commitments and health concerns play into retirement—it can be hard for plan sponsors to step in.
“You can lead the horse to water, but, ultimately, the individual has to take it on themselves,” he says. “There are a lot of very personal aspects that are difficult for employers to take over from their employees.”
However, retirement planning can also be so overwhelming for members that it’s necessary for plan sponsors to offer assistance. But too often, given the focus on the individual, some plan sponsors end up distancing themselves too much—leaving the employee alone and confused.
“We see approaches where the member is asked directly, ‘What rate of return do you think you’re going to achieve on your investments?’” he says. “That’s not a question that anybody can fairly answer, let alone the worker on the shop floor.”
Watch the video for Shlesinger’s suggestions on tools and methods to educate members and help them better prepare for retirement.