BOFA says that roughly 70% of employers feel "some sense of responsibility" in helping employees plan for retirement, but only about 40% are actually helping them do it. Gee, the company would like to help employees get a leg up on retirement planning -- it sounds good, and it's really important and all! -- but we just don't know what kind of help we want to give employees. So we're sort of kind of doing...not much. I'll let BOFA's press release explain:
Nearly 70 percent of employers feel some sense of responsibility for helping employees secure the assets needed to sustain them later in life. However, workers nearing or in late stages of their career often find themselves on their own when it comes to transitioning into retirement. For example, just 39 percent of employers offer their retiring employees guidance on what to do with their 401(k) assets, while only 20 percent help educate employees on such issues as preparing for future health care costs or understanding when to take Social Security as they approach traditional retirement age.The line to become an 80-something Walmart greeter will be forming to the right, and please don't crowd.
This may be in part the reason why less than half (42 percent) of employees surveyed feel they are on track to financially support their desired lifestyle in retirement, and another 22 percent have no idea whether they’re on track to do so or not. This lack of confidence may be one reason why 73 percent of all employees surveyed see themselves working into their 70s.
In fact, 55% of employers in the BOFA survey communicate with employees once a year or less about retirement planning. In this case, "or less" means pretty much never. Why? Companies say they don't have the time, and the subject matter is way too complicated. (Plus, it still feels like a recession, companies are sitting on their cash, and employee retirement planning is an expense. BOFA didn't say that, but I will.)
In small employers' defense, however, retirement planning can be intimidating and complicated to the point where one almost needs to be a Warren Buffet to understand it all. It's a sure bet that the vast majority of employees attending retirement planning presentations don't know the difference between a stock portfolio and a P/E ratio either, because they aren't stock market analysts by training. For the financial whiz leading the presentation, it can be like dealing with the kid right before the high school chemistry final who raises his or her hand to ask: "What's an electron, and how do I calculate the mole? Could you please go over that again?" Geez, really!? Where have you been all semester?
Lingo-challenged employees who have had a 401(k) for a long time don't want to look stupid, and so they simply nod their heads in agreement with the lingo-spouting third-party retirement expert or HR employee only to walk away as confused about managing a 401(k) as they were before. Welcome to the modern state of employee retirement planning. There has to be a better way. Maybe "P/E" should stand for "petrified employee" instead. Now that's a term employees would understand.