Tag Archives: PlanAhead

Utah-based Milliman clients recognized by “Save 10” initiative

Griffith-RobertMilliman was pleased to collaborate with the Financial Services Roundtable (FSR) to recognize Utah-based employers as part of our ongoing participation in the “Save 10” initiative. The initiative is a business-to-business, peer-to-peer effort encouraging responsible employers to help their employees better prepare for retirement.

The Salt Lake City event to recognize the employers was highlighted by a speech from Orrin Hatch, the senior U.S. senator from Utah. Senator Hatch discussed the importance of retirement savings and the need for strong organizations to provide their employees with the ability to have adequate savings for retirement. The event included a roundtable discussion where Tom Topik, Human Resources (HR) Strategic Business Partner of ARUP Laboratories and a client of Milliman, discussed the importance of retirement savings and the tools available for his employees to take charge of their retirement programs. Tom specifically highlighted the auto enrollment process and the use of Milliman’s InvestMap™ product to help employees properly invest using a custom asset allocation appropriate for their age and risk tolerance.

In addition to ARUP Laboratories, these other Milliman clients were recognized: America First Credit Union, OOCL (USA), and Twinlab Consolidated Corporation. All of these organizations were recognized for their dedication to retirement savings by including auto features in their retirement plans (either auto enrollment, auto escalation, or both) and enabling employees to save at least 10% of their incomes for retirement.

Save 10 Utah - Award Winners
Utah-based employers recognized by the Save 10 initiative.

The Save 10 initiative is a program that encourages retirement savings to remain in the forefront of employers’ and employees’ minds. The initiative also helps incentivize other companies to take a look at their retirement programs to see if they can make them better.

For more on Milliman’s retirement planning tools, click here.

Milliman clients recognized by “Save 10” initiative

Milliman announced this week that a group of its clients will be recognized by the Financial Services Roundtable’s “Save 10” initiative, which is a business-to-business, peer-to-peer effort encouraging responsible employers to help their employees better prepare for retirement by helping them to save 10% of their income.

“One of the best ways to help people save for their financial future is for companies to automatically enroll employees in workplace savings programs,” said former Minnesota Governor Tim Pawlenty, chief executive officer (CEO) of the Financial Services Roundtable. “Save 10 recognizes such companies, and we hope that by highlighting their terrific efforts, more companies will become Save 10 employers.”

The Milliman clients joining the Save 10 effort include Mankato Clinic, Francis Investment Counsel, Fish & Richardson, Tiller Corporation, Southern Minnesota Beet Sugar Cooperative, CliftonLarsonAllen, Felhaber Larson, and Communications Systems, Inc.

“We work with our clients to provide a meaningful retirement benefit,” said Milliman principal Kevin Skow. “Features like auto-enrollment and auto-escalation allow employers to better help their employees save for retirement. Our plan participant tools help to educate employees on how much they need to save and how they can accomplish their retirement goals.”

Nearly 82% of employees save for retirement when their employers offer an auto-save program compared with just 64% when employers do not. Save 10 aims to fundamentally change these facts.

To be considered for recognition as a Save 10 employer, companies must certify that they engage in certain activities that qualify them as Save 10 certified. This includes offering a retirement plan, providing employees opportunities to save 10% of their income, contributing to employee retirement accounts, ensuring employees can “keep 10” by providing access to disability and life insurance plans, and other criteria.

Other companies that have joined the Save 10 effort include Allstate, Assurant, AXA, EZE Castle Integration, First Horizon, Franklin Resources, IBM, LPL Financial, Mastercard, Nationwide, Northern Trust, Popular Community Bank, Principal, Prudential, Putnam Investments, Quicken Loans, State Farm, SunTrust, TransAmerica, Toyota Financial Services, United Technologies, and UNUM.

For more on Milliman’s retirement planning tools, click here.

Plan sponsors: How to keep employees on track for retirement readiness

Guanella-JayPeople get excited about technology. There are hundreds of websites chronicling the next big thing in technology, presenting information about how a device will save you time and money while providing entertainment. Getting people excited about or even acknowledging a retirement plan is much more complex. Over the years, there have been several new features created to help participants by increasing the flexibility of how they fund their retirements. Participant inertia is a large problem and directly relates to the usage of these new features.

As retirement plan professionals we believe having a solid retirement strategy is a no-brainer. For us, it’s a partnership with the plan sponsor that leads to great results by getting them involved and sharing responsibility of communicating and educating the participants. Human resource professionals have direct contact with employees and a great understanding of the best communication mediums and incentives that drive employees to take action.

There are several tools available for participants to project their retirement income. One of them, PlanAhead for Retirement®, enables participants to input additional income sources and variables to project their replacement incomes. Through the PlanAhead for Retirement tool, there is also a retirement readiness report that provides clients a view of the expected retirement outcomes of their participants on a plan level. The retirement readiness report displays where participants fall in relation to their projected replacement income at retirement. The report allows the client to change several variables such as the target of replacement income, return on investment, and changes to employer contributions. This is further broken out by age, service, and participant contribution rate. This interactive report helps the client make the leap from using current data such as participation rate and average deferral rate to projecting the results in the future.

PlanAhead_exhibit_1

At a plan sponsor level, using industry-related statistics on participation rate and average contribution rates we can show plan sponsors how they compare to their peers. Any deficiencies in the peer comparison are consulting opportunities. Using their participant demographic data, scenarios can be created to determine how changes to plan design (i.e., adding or increasing employer match) or targeting communication to specific participants encouraging them to take advantage of the benefit provided will improve results.

At an employee level, the medium of communication and the timing of the call to action are also paramount. Coordinating the retirement plan education and enrollment at the same time as other benefit enrollment periods has advantages as the employee is already completing paperwork. Showing an employee general information on plan demographics can also lead to an increase in participation and contribution rates via competition. Inertia is present in all retirement plans. What better way to promote change than to make it a competition, albeit an internal one.

Getting a plan sponsor to act on a retirement plan is just as important as getting the employees to act. As retirement plan professionals, we know that developing a partnership with sponsors can help lead to great results, keeping employees on track and taking steps to more successful retirements—using that flashy new technology that makes it easier for everyone.

Retirement readiness: How long will you live in retirement? Want to bet on it?

Skow-KevinThe U.S. Department of Labor now offers a tool to help employees assess their paths toward providing for their retirements. Employees who use the website to input their ages, 401(k), 403(b) or IRA balances, annual contribution amounts, and years to retirement are provided a projection of the monthly income they might expect to receive in retirement. A sample result is provided in the graphic below. For more information, click here.

Retirement readiness blog_K. Skow

The calculations include adjustments for future investment earnings and inflation. Details about the assumptions used are available by clicking the “View Instructions” link.

The tool makes a simplifying assumption that may cause employees to underestimate how much they will need at retirement. It assumes each employee will survive in retirement according to an average life expectancy (roughly age 85 to 90, depending on retirement age, gender, etc.). That may be true for half of us, but what about the other half? Relying on any tool to calculate how much we can spend in retirement may cause our retirement account balances to run out sometime around our late 80s. What happens then?

401(k) and 403(b) plans were initially designed to provide supplemental income in retirement. Over the years they have become the primary retirement plan for most employers. More and more employees are relying on their employer retirement plans for retirement security. Getting good information about the adequacy of these plans is critical.

Employees should review the assumptions behind the calculations used in retirement planning. Terms like “life expectancy,” “annuity conversion,” or “average lifetime” imply the results will be sending roughly half of the tool’s users on a path to disappointment. While these plans are not designed to provide a guaranteed income at retirement, addressing the possibility of living well into one’s 90s will help employees plan for a more secure retirement.

Milliman’s PlanAhead for Retirement® tackles this dilemma by asking this question. The input can be modified if desired, but this foresight better projects the reality that employees may face. As a result of this realization, employees may modify their saving, investing, and spending patterns to better prepare them for life in retirement.

Sample results show this impact in the graphic below.

Retirement readiness blog 2_K. Skow

Retirement readiness blog 3_K. Skow

This is one of the many assumptions that need to be considered when evaluating an employee’s benefit adequacy in retirement. We will continue to explore other aspects in this series on the subject of retirement readiness.

Google+ Hangout: PlanAhead for Retirement®

Milliman’s retirement planning tool PlanAhead for Retirement can help defined contribution plan participants better understand how their account balances translate to retirement income. The tool helps individuals learn what they need to do on their own to adequately prepare for retirement.

In this Google+ Hangout, Jinnie Olson demonstrates how PlanAhead functions.

To learn more about PlanAhead, click here.

PlanAhead for Retirement® allows plan participants to understand and act upon their retirement needs

Milliman today announced the rollout of PlanAhead™, unique tools and targeted services to take employee retirement planning to the next level. Included in the suite of services is PlanAhead for Retirement®, a powerful participant web application that serves as a single destination for all of a participant’s retirement planning and investing activities. This tool allows participants to understand their retirement preparedness at a glance, providing insight that is very individualized and specific.

“Tomorrow’s retirement plan requires a more informed and involved plan participant, and PlanAhead for Retirement is the engine for this next generation participant experience,” said Lance Burma, Employee Benefits Practice Director. “The tool is easy to use and will make retirement plans more transparent than ever before, allowing plan participants to understand where they are, where they are going, and what they need to do in order to achieve their retirement goals.”

While the user experience is simple, the underlying technology is robust and sophisticated. Participants can supplement their defined contribution and defined benefit retirement plan information with other assets and investments, and will receive a snapshot of their progress toward retirement goals. Underlying this snapshot is a powerful Monte Carlo simulator that runs thousands of scenarios to project likely outcomes. Participants can then make adjustments and chart the long-term implications of different investment and saving strategies. These features are complemented by a robust library of retirement information and educational resources, making PlanAhead for Retirement a single retirement planning resource for any participant in an employer-sponsored retirement plan administered by Milliman.

Thousands of participants in Milliman plans have already begun to benefit from the PlanAhead experience while others will continue to be phased in over time. For more on PlanAhead for Retirement, go to milliman.com or contact your Milliman consultant.