As 2021 comes to a close we can start looking towards what is in store for 2022. Here at RPCSI, we are preparing for 2022 by looking at what trends are predicted for the retirement industry for the coming year. These trends can help us understand the current market better and meet the needs of our clients. Let’s take a look at some of the 2022 retirement planning trends.
Financial Wellness
The demand for financial wellness programs is increasing each year and 2022 will be no exception to that. Many employees are currently looking for help in managing their retirement planning from their employers. Employees that have poor financial wellness have 44% more absences and loss of work time than their peers who are financially stable.
Plan Access
Currently, in the US there is a gap in retirement savings. Only 64% of workers in private industries have access to retirement savings plans. New regulations at both state and federal levels have been made in recent years to try and close this gap, but there is still a lot of work that needs to be done. Incentives for auto-enrollment and auto-escalation have been talking points within these proposed regulations. Financial advisors and TPAs should plan on seeing more employers working on offering their employees their own retirement plans.
Embracing Change Post-Covid
Covid-19 has drastically changed the lives, both personal and work, of many across the world. TPAs and financial advisors should be prepared to see more people retiring and leaving the workforce. This may affect how employers handle their retirement plan offerings. Covid has also taken a toll on the economy, so advisors should keep an eye out for rising inflation and volatile stock markets.
TPAs Serving as 3(16)
Every retirement plan must have at least one 3(16) fiduciary to manage the administrative work of the plan. Often that is the plan sponsor, but there is a growing trend that the 3(16) fiduciary is outsourced from the plan sponsor to a company that specializes in handling the administrative work of the retirement plan. There has been an uptick in TPAs serving as 3(16) fiduciary for their clients. Traditionally TPAs do not handle all the decisions for a retirement plan and the plan sponsor has most of the control. Looking at trends for 2022 though, TPAs could be moving towards having more or full control of the retirement plan, leaving only some decisions to the plan sponsor.
RPCSI works hard to keep up with the ever-changing retirement planning industry. We understand that each business is unique and that these trends will affect each business differently. To learn more about how we can help your business with retirement planning contact us today.
