Amidst the Coronavirus crisis, a compelling problem will be unmasked by the economic turmoil that will challenge market stability for months or longer. Retirement readiness has not been effectively delivered to the majority of retirement plans. This was a problem before the Covid 19 pandemic, and it has become a crisis.
Even before the unprecedented instability and uncertainty of the current landscape, a study conducted by MassMutual* found that plan sponsors are seriously concerned about the financial wellness of their employees. The study included a total of 863 mostly small plan sponsors with retirement plan assets of between $1 million and $75 million. It concluded that employers will need to step up their efforts to offer more meaningful support.
Plan sponsors recognize that there are numerous real world challenges impacting employees beyond their standard benefits. Coping with debt management such as student loans, low savings rates, child and elder care and escalating healthcare costs are serious financial concerns.
These are not theoretical challenges, but concerns talked about everyday. Employers grasp the enormity of the dilemma by observing the incidence of second jobs and the number of loans taken from retirement plans.
The study finds that eight in ten employers say their workers are struggling financially as they wrestle with the balancing of retirement savings, credit card, student loan repayments, tuition debt and medical costs, and more.