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Pension Plans and Retirement Savings: Useful Tools for Members

By Heather Kerrigan | Dec 11, 2017

Saving can be difficult, and pension plans are often confusing. Although your members may put off mapping out their retirement, the reality is most Americans today can expect to spend 20 years or more in retirement, so understanding their pension plans and knowing how to make the most out of personal savings and investments is critical.

Members — particularly those approaching retirement — should understand the importance of keeping track of their benefits and preparing for a financially secure exit from the workforce. There are many tools at your disposal, both within your company and from other organizations, that you can share with members to help them plan and prepare.

The Benefits Administrator

It might be one person or an entire team, but your benefits administrator is a vital component of helping staff understand their plan and benefits. Encourage your members to reach out to your benefits administrator with any questions they might have related to your pension plans, how benefits are accrued or how funds are paid out in retirement. Make this individual or team visible during company meetings, onboarding or training, and regularly share contact information to make the benefits administrator more approachable and easy to reach.

Pension Plan Statements and Websites

Statements from pension plans typically arrive quarterly or annually either via email or through an online account. Remind members to review these documents, which provide a snapshot of the individual's pension plan account, including information on earned benefits and the estimated monthly benefit in retirement based on current age and earnings. Statements may also include recommended actions to improve savings or ensure retirement goals are met. If they have questions or need additional information, direct members to the benefits administrator or plan website.

Resources for Retirement Planning

Simply relying on pension plans won't guarantee a secure retirement. According to a study by the Economic Policy Institute, the median retirement savings for all working age families in the U.S. is only $5,000, and that won't go far, especially considering some estimates that retirees spend more in their post-work years than while on the job.

Talk to your members about the necessity of long-term financial planning for retirement that takes into account expected income in retirement — from a pension, other retirement account, Social Security or a part-time job. Also, discuss the desired standard of living, health care and household costs, along with an estimate for unexpected events such as a significant health crisis.

It may be a good idea to direct your members to government help websites such as the Financial Literacy and Education Commission, the Department of Labor and the Social Security Administration. Each of these offer a wealth of tools, calculators, articles and other resources to help staff better understand what they'll need in the future and how to adequately plan for retirement.

The most important thing you can do for your members is to consistently remind them to learn about — and fully understand — their pension plans and prepare for their retirement. Making these tools readily available is key to moving your staff in the right direction.

Heather Kerrigan started her career in journalism at Governing magazine, reporting on state and local politics and policy, with a specific focus on public workforce, environment, health care, education and technology issues. Prior to co-founding River Horse Communications, Heather offered freelance editorial services to a variety of outlets, including serving as volume editor and lead author for SAGE Publications' Historic Documents series and editor-in-chief of The Kanter Journal. Heather also blogs for two government-focused publications, GovLoop and NEOGOV, covering issues of importance to federal employees. Heather is the author of the book Retire Rich With Your 401(k) Plan. She holds a bachelor's degree in journalism from The George Washington University.