Personalized Assessments Help Employees Save and Invest More for Retirement

Feb. 4, 2011 - PRLog -- Staying focused on retirement income goals is critical to helping employees achieve fully funded retirements, according to experts at Diversified Investment Advisors, Inc., a national firm specializing in retirement plans.  

“Having a single but comprehensive measure helps plan participants understand easily where they stand in terms of progress toward their retirement savings goals and enables them to evaluate which actions are most likely to lead to a more financially secure retirement,” said Patricia Advaney, senior vice president of participant solutions for Diversified. “When employees are educated in this way and engaged over the long term, they are much more likely to plan appropriately.”

Advaney added that Diversified has long championed the need for participants to focus on their long-term retirement goals, having pioneered its OnTrack® Report more than a decade ago. This personalized report, mailed annually, includes a “retirement outlook” that estimates how much of a retirement income gap an individual has and what steps can be taken to close that gap. The benefit of the retirement outlook is that it is a comprehensive, multi-dimensional measure that incorporates a number of factors in gauging an individual’s estimated retirement income versus his/her goal.  Based on information that a participant has entered online (or using reasonable assumptions otherwise), the retirement outlook takes into consideration an individual participant’s age, gender, salary, savings rate, investment strategy, outside assets, retirement income goal, expected Social Security income and other pension benefits.

The retirement outlook provides participants with constant feedback for how well they are doing with respect to their retirement income goal.  Participants can go online to see their most up-to-date retirement outlook, input additional information or model various scenarios to determine whether they need to make any changes to the saving and investing strategies.

“We emphasize tools and services that don’t just educate but encourage positive savings behaviors—helping employees optimize the important retirement benefit provided by their employer,” said Advaney.

In addition to having a comprehensive tool for participants, Advaney noted that Diversified serves plan sponsors by offering the ability to aggregate individual data and report on groups of participants. “After all, the ‘holy grail’ is retirement income adequacy.  Being able to look at retirement outlook scores across an entire employee population and then breaking it down by different segments can be very telling and even eye-opening,” she said. “In some cases, we’ve helped plan sponsors discover disparities among groups that aren’t explained by the obvious factors such as salary or age, for instance.  It’s really changed the nature of the conversations.”

Advaney said she is encouraged by the industry’s move from a focus almost exclusively centered on accumulation to one that is now also helping participants understand how their savings will translate into a retirement income stream and includes the use of guaranteed lifetime income solutions.  “Today, we are seeing the retirement plan industry take a broader and more holistic view of retirement savings, which is a win-win for plan sponsors and participants alike. This ‘DB-ization of DC plans’ underscores how committed employers are to their employees’ financial security and is a natural evolution following the dramatic changes that have taken place with respect to retirement plans,” she said.

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Diversified Investment Advisors, Inc. is a leading provider of customized retirement plan administration, participant communication and open architecture investment solutions for mid- to large-sized organizations. The company’s expertise covers the entire spectrum of defined benefit and defined contribution plans, including: 401(k) and 403(b) (Traditional and Roth); 457; non-qualified deferred compensation; profit sharing; money purchase; cash balance and Taft-Hartley plans; and rollover and Roth IRA. Diversified helps more than 1.7 million participants save and invest wisely for and throughout retirement.

Headquartered in Harrison, NY, the company’s regional offices are located in Arkansas, California, Florida, Illinois, Iowa, Louisiana, Maryland, Massachusetts, New York, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Utah and Wisconsin. To learn more, visit www.divinvest.com.