Nobody can see your invisible jet: Why you need a retirement plan philosophy
Last week we walked through a few simple, guiding questions to help you define your retirement plan philosophy. Now that you have your prime directive in place, let’s talk about why it’s important for your employees, your company culture, and the sustainability of your business.
For growing companies at an inflection point within their human resource capacity, a retirement plan philosophy provides a clear reference point for what’s important and what’s not within an organization, for both employees and executive leadership.
Imagine you’re Wonderwoman and the retirement plan you’re building is like an invisible jet. Without a point of reference, you’ll be the only on who understands what you’re talking about, because you’re Wonderwoman. Your retirement plan philosophy is the framework that aligns your employees, company culture, and the future sustainability of your business.
For your employees, in the aftermath of the 2000-2002 market crash, followed by the 2008-2009 downfall, there’s a pessimistic reluctance when it comes to making any retirement investments. Your retirement plan philosophy provides a reference point for plan participation that employees can get on board with because they can understand and trust it.
The irony, according to the Employee Benefit Research Institute is that, “Retirement confidence is strongly related to retirement plan participation, whether in a DC plan, a DB plan, or an IRA.”
Employees that participate in a plan are more confident about their retirement future, because they’re participating in the plan. The way to lead them there is through education that clearly communicates their investment options aligned with your retirement plan philosophy.
For your company culture, the plans being built out should also be aligned with the core values of your organization. Your employees work for your company because they believe in your mission and values. Those same values are outward facing in your community as well. Defining your retirement plan philosophy ensures the plan clearly communicates your company culture, each step of the way.
For the sustainability of your business, a retirement plan philosophy can help you choose the right type of investment advisor to help you build a plan that connects competing the objectives of increasing company growth, while limiting liability and ensuring that all employees have benefits that meet their needs and reflect the company culture.
There are a lot of moving pieces within your company, and assessing a good plan fit between employee needs, company culture, and company sustainability can be challenging. That’s why Retirement Planology® works closely together with executive teams and HR departments to establish a retirement plan philosophy before beginning any plan work.
To learn more, download our free white paper below.