"As the DC industry continues to evolve, pension plan sponsors are recognizing that their members are getting closer to retirement and that their previous focus of just helping their employees save enough for retirement needs to expand," says Sue Reibel, senior vice-president, business development, group benefits and retirement solutions, with Manulife Financial.
"Still, I don't believe that means the employer wants to retain accountability for that employee after they retire."
recounts a story where, three years ago, she
was in a room with 50 different Manulife employer clients as part of an annual professional development session.
The employers were asked if they felt any obligation to support their employees in retirement.
Only three senior HR executives put up their hands.
The employers were also asked if they felt the need to provide their members with any financial planning advice in preparation for retirement.
says maybe 30% said yes.
"I don't think we'll see this rush of employers wanting to maintain DB-like accountability for their employees because it's about more than just retirement dollars," explains Reibel
"It's about health benefits, too.
And we're seeing most employers in the private sector go the opposite way on those retiree benefits: employers are trying to get away from being responsible for the health benefits of their retired employees."
believes the DC industry, as a whole, needs to move toward offering a variety of post-retirement options that satisfy both the pension plan sponsors that want to take on more responsibility for their employees post-retirement and the retirees who don't have that support.