Don’t Stop Savin’ Up For Tomorrow

OXON HILL, Md. -- The personal saving rate in the United States hovers between 5 and 6 percent, according to data from the U.S. Bureau of Economic Analysis.

That is a problem, experts caution. It is a chronic problem that leaves many Americans woefully short of funds for unexpected expenses, long-term health care needs, and a rewarding retirement.

Possible solutions are many, and a panel will discuss them today at the 2017 LIMRA Annual Conference.

The panel is expected to include representatives from Prudential, Charles Schwab and Alight Solutions.

Panelists are honing in on “financial wellness,” said Deb Dupont, associate managing director for LIMRA Secure Retirement Institute. Identifying the concept is the first step, she explained.

“Financial wellness feels like a unicorn lately. It’s like this mythical beast,” she said. “We’re seeing so much attention paid to it, but not a whole lot of attention paid to what the definition is.”

“Freedom from financial stress” is how Dupont defines it, adding that the workplace is the logical place to promote financial wellness.

According to the Bureau of Labor Statistics, 46 percent of employers offer defined contribution (DC) retirement plans. Only 58 percent of civilian workers (62 percent of private-sector workers) have the opportunity to save for retirement via a DC plan.

Generally, the larger employers offer such plans, accounting for the discrepancy of numbers. Still, roughly 50 million workers have no access to workplace retirement savings plans, LIMRA reports.

And both employers and employees are losing, Dupont said.

“There are plenty of studies showing how stressful and damaging financial stress can be in the workplace," she said.

About 75 percent of workers want to save for retirement through their employer, a LIMRA study from earlier this year revealed. In fact, 53 percent of workers believe that employers should be required to offer savings plans.

Sixty percent of workers actually take it a step further and feel employers should contribute to their employees' retirement savings accounts.

The industry has an opportunity to step up in partnership with employers to help educate Americans on financial issues, Dupont said.

The controversial Department of Labor fiduciary rule foresaw this scenario and provides a carve-out for retirement plan education.

“We’re definitely talking about expanding the relationship with the 401(k) provider because it’s the logical place to provide that,” Dupont said. “As an industry we do an OK job educating people. … You have to take certain baseline actions for to start them on that path.”

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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