Navigating workplace retirement plan trends for employers

How designing the right plan benefits companies and their employees.

Retirement plans today—and how they’re changing

Over the recent past, some things about workplace retirement plans have remained constant. Eager to recruit and retain top employees, employers and plan sponsors have continued to offer 401(k)s and 403(b)s as an incentive. They have encouraged workers up and down the salary scale to participate, often by agreeing to match a portion of the employees’ contributions. Companies have also sought to educate their workforces about the very real benefits of setting aside as much as possible as early as possible to help ensure a secure and comfortable life after work.

Yet there has also been constant tinkering with those basic formulas. The advent of Roth account options has given employees another way to save that could provide a tax-free stream of retirement income. Target-date retirement funds have simplified plan menus and offered an increasingly popular investment choice that adjusts investment allocations over time. Automatic enrollment, which signs up employees who don’t opt out, has been remarkably successful at increasing participation rates, which have reached record highs. The SECURE 2.0 Act of 2022 will make that a mandatory feature for most plans beginning in 2025.

Consider some of the latest trends for defined contribution plans.

  • A diverse four-generation workforce. A diverse four-generation workforce. Each generation—Gen Z, Millennials, Gen X and Baby Boomers—is facing its own unique challenges.
  • The impact of a tight job market. With low unemployment, employers must constantly reevaluate their benefits, including retirement plans, to make sure they remain competitive.
  • A growing focus on financial wellness. The financial stress of the pandemic, heightened by high inflation and volatile investment markets, has weighed on America’s workers.
  • Changing strategies to meet employees. Communicating crucial retirement plan information to employees took an abrupt turn during pandemic shutdowns. Companies are learning that one strategy does not fit all.

Where to start?

The Regions Institutional Retirement Services team works with plan sponsors to create and maintain defined contribution retirement plans that meet employers’ and employees’ needs, adapt to shifting regulatory requirements and help give companies a competitive edge in recruiting and retaining key employees.

At Regions, we sit on the same side of the table with our clients, helping you evaluate your current retirement program and finding solutions that fit your organization’s size, demographics and goals.

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If you would like to know more about how we could help your organization, visit Retirement Plan Services.