With workforce staffing shortages remaining consistent, now might be a good time to review your retirement benefits program to explore if it can better help retain employees.
The wake of the global pandemic, inflation, and volatile markets are driving employee concerns about financial well-being. As an employer in this ‘new normal’ world, you may have faced your own set of obstacles: meeting an increased demand for services, making sure your employees stay safe, and navigating “The Great Resignation” and ongoing labor shortages.
Now, perhaps more than ever, employee well-being has become a key workplace focus—not only employees’ physical and emotional well-being but their financial wellness too. As employers plan for the year ahead, now is the perfect time to think about how 401(k) and 403(b) retirement plan design can contribute to your employees’ overall sense of financial wellness, which ultimately will enable you to recruit new talent and retain valued staff.
In their 2022 Workplace Wellness Survey, the Employee Benefit Research Institute (EBRI) interviewed a diverse sample of over 1,500 Americans and discovered that most employees are concerned about their household’s financial well-being.
Two-thirds of employees said they rely on their employer to ensure that they are physically, emotionally, and financially well, but less than half rated their employer highly in these areas.
Financial wellness extends beyond salary. A lack of knowledge can negatively impact your employees’ savings and retirement goals, so it is critical to provide education, engagement, and effective retirement planning tools. These tools can help employees decide how much to contribute to their workplace retirement plan, choose investment options, and consider when, or if, to make changes.
Educational campaigns have also proven effective in increasing the employer retirement plan participation rate among employees who have not yet enrolled. In addition to employee concerns about financial well-being, new regulations make now a good time to review your 401(k) and 403(b) retirement plan design.
The IRS has announced new, significantly higher contribution limits. The 2023 contribution limit for 401(k) and 403(b) plans is $22,500 for employee contributions and $66,000 for combined employee and employer contributions. The 2023 catch-up contribution is capped at $7,500, meaning that employees aged 50 and over may contribute up to $30,000.
Now is the perfect time to evaluate your existing retirement benefits program and to encourage participants to reevaluate how much they want to contribute, which can make a significant difference in their long-term financial well-being.
To conduct a formal review of your current plan, or for more information about our “bundled” services approach, including our participant education services, please contact Mutual of America Account Representative Steven Ortiz at [email protected].
You should consider the investment objectives, risks, charges, and expenses of the funds carefully before investing. This and other information is contained in the funds’ prospectuses and summary prospectuses, which can be obtained by calling 800.468.3785 or visiting mutualofamerica.com. Read them carefully before investing.
Steven Ortiz is an Account Executive for Mutual of America.
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