PLANADVISER - November/December 2022 - 4

data points //
Just One Slice of the Pie
Workers who 'don't save enough' in their DC plan may have other means
D
efined contribution plans are
an important source of retirement
income for many present
and future retirees. That sentiment
was evident in our ninth annual PLANSPONSOR
Participant Survey, where,
this year, 2,301 American workers
responded to questions about their
financial behaviors, preferences and
attitudes. Of this group, 774 full- or
part-time employees currently participate
in an employer-sponsored DC plan.
Half (51%) of the participant-respondents
defer less than 5% to their plan-
far less than the industry-recommended
savings rate of 10% through
15% of compensation. Only 14% of
participants save more than 10%.
While these rates might seem low,
and cause employer-generated retirement
projections to show participant
savings deficits
in some cases, DC
plans are just one piece of people's
savings. When asked what sources
of income the participants expect to
have in retirement, they cited significantly
more than their present plan.
Fifty-five percent will look to income
from a DC plan account at one or more
prior employers, plus any such plans
belonging to a partner; almost 60% will
rely heavily on Social Security, and 31%
will rely on a traditional pension plan.
Excluding Social Security, outside
savings can have a usefulness beyond
being future income: When they are
accounted for on the DC plan's platform,
they can make the participant's
plan account work harder, by expanding
its available resources and contributing
personalization. When viewed in
total, they also create a more detailed,
trustworthy picture of the participant's
retirement readiness.
Adding assets to a provider platform
can be a challenge for participants. Still,
" Whether you're entering information
about outside savings or nonqualified
money, it can make a huge difference, "
says Terry Burns, managing director of
capabilities for the retirement services
Contribution/Saving Rate
l < 5%
l 5.0% - 7.0%
l 7.1% - 10.0%
l >10%
l Unsure
50.7%
17.6%
14.9%
14.2%
2.7%
Income Sources in Retirement
DC plan account at current employer
Social Security
84.0%
59.6%
DC plan account/s at prior or partner's employer/s 54.9%
Individ retirement acct - traditional, Roth or rollover 45.8%
Traditional pension plan
Inheritance
Any other accounts designated for retirement
Real estate equity
Nonqualified plan
Other
Source: 2022 PLANSPONSOR Participant Survey
division at OneAmerica in Indianapolis.
The better the person can factor in
the outside assets, the better the plan
services will be, he suggests. " And then
we see engagement go up at the participant
level. "
Having an account personalized in
this way is key for pre-retirees, who may
have an increasingly complex financial
picture, but also for younger participants
who may expect personalization
here, just as they expect it in other
dimensions of their consumer life.
Advisers can help in this process by
seeking participant data from recordkeepers
and using that to personalize
communications and further tailor
their services. Burns expects personalization
to continue as an integral part of
financial offerings. -Judy Faust Hartnett
30.5%
29.8%
26.9%
26.4%
23.5%
14.0%
4 | planadviser.com November-December 2022
http://www.planadviser.com

PLANADVISER - November/December 2022

Table of Contents for the Digital Edition of PLANADVISER - November/December 2022

Built to Last
Cyber Ready
Measure Your Footprint
Determinants of Profitability
Keep a High Profile
Strategic Moves
The Value of a VCOC
Retroactive Compliance Reviews
Sheri Fitts
PLANADVISER - November/December 2022 - Cover1
PLANADVISER - November/December 2022 - Cover2
PLANADVISER - November/December 2022 - 1
PLANADVISER - November/December 2022 - 2
PLANADVISER - November/December 2022 - 3
PLANADVISER - November/December 2022 - 4
PLANADVISER - November/December 2022 - 5
PLANADVISER - November/December 2022 - 6
PLANADVISER - November/December 2022 - 7
PLANADVISER - November/December 2022 - 8
PLANADVISER - November/December 2022 - 9
PLANADVISER - November/December 2022 - 10
PLANADVISER - November/December 2022 - 11
PLANADVISER - November/December 2022 - 12
PLANADVISER - November/December 2022 - 13
PLANADVISER - November/December 2022 - 14
PLANADVISER - November/December 2022 - 15
PLANADVISER - November/December 2022 - Built to Last
PLANADVISER - November/December 2022 - 17
PLANADVISER - November/December 2022 - 18
PLANADVISER - November/December 2022 - 19
PLANADVISER - November/December 2022 - 20
PLANADVISER - November/December 2022 - 21
PLANADVISER - November/December 2022 - Cyber Ready
PLANADVISER - November/December 2022 - 23
PLANADVISER - November/December 2022 - 24
PLANADVISER - November/December 2022 - 25
PLANADVISER - November/December 2022 - Measure Your Footprint
PLANADVISER - November/December 2022 - 27
PLANADVISER - November/December 2022 - 28
PLANADVISER - November/December 2022 - 29
PLANADVISER - November/December 2022 - Determinants of Profitability
PLANADVISER - November/December 2022 - 31
PLANADVISER - November/December 2022 - 32
PLANADVISER - November/December 2022 - 33
PLANADVISER - November/December 2022 - Keep a High Profile
PLANADVISER - November/December 2022 - 35
PLANADVISER - November/December 2022 - Strategic Moves
PLANADVISER - November/December 2022 - 37
PLANADVISER - November/December 2022 - The Value of a VCOC
PLANADVISER - November/December 2022 - Retroactive Compliance Reviews
PLANADVISER - November/December 2022 - Sheri Fitts
PLANADVISER - November/December 2022 - Cover3
PLANADVISER - November/December 2022 - Cover4
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https://www.planadviserdigital.com/planadviser/july_august_2019
https://www.planadviserdigital.com/planadviser/may_june_2019
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https://www.planadviserdigital.com/planadviser/september_october_2018
https://www.planadviserdigital.com/planadviser/july_august_2018
https://www.planadviserdigital.com/planadviser/may_june_2018
https://www.planadviserdigital.com/planadviser/march_april_2018
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https://www.planadviserdigital.com/planadviser/september_october_2017
https://www.planadviserdigital.com/planadviser/july_august_2017
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