GA August 2021 Newsletter

  • VOLUME XLVI | NUMBER XLIII | August 2021

    • Generational Influences and Behavioral Finance

      Understanding generational attitudes toward investing and the cognitive biases that can lead participants astray is key to helping employees of all ages improve their financial wellness and prepare for a secure and successful retirement. Boomers: Baby Boomers may be inclined to drop cognitive anchors based on early information that cements their opinions. Unfortunately, when anchoring reference points are arbitrary or uninformed, Boomers may find themselves overconfident in financial decisions that fail to serve them over the long term. And if these decisions lead them to take on excessive risk, the results could be disastrous as they approach retirement. Financial professionals can help Boomers avoid the anchoring bias and take a more objective approach to investing by using financial wellness assessment data to direct them toward...

       

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    • Measuring Financial Wellness

      Establishing financial wellness metrics has become increasingly important over the last year. The COVID-19 pandemic has created economic hardships for many American families, depleting emergency funds for some and forcing others to take on additional debt to cover necessary expenses. At work, the resulting stress can lead to increased absenteeism, decreased productivity and greater health care costs for plan sponsors. Helping employees improve financial wellness is key to mitigating a number of these risks. A 2019 EBRI survey found top reasons organizations provide financial wellness programming include: enhanced satisfaction (46%), reduced financial stress (42%), increased retention (35%) and improved utilization of employer benefits (35%). But in order to tell if what they’re doing is making a meaningful impact, organizations need appropriate metrics to gauge the...

       

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    • Retirement Plan Document Retention: What Should Fiduciaries Keep?

      ERISA requires employers to retain certain documents. These records are critical if your plan were ever to be challenged by the IRS, DOL or plan participants. We recommend saving the following in some type of fiduciary briefcase: • Agendas • Fiduciary Investment Reviews • Meeting Minutes • Plan Governance Documents (such as): Board Resolutions Charters Acceptance/Resignations • Plan Reviews • Educational Materials In addition, we recommend that you include other important documents for future retrieval such as: • Plan Documents • Amendments • SPDs • SMMs • Plan Policies • Participant Educational Materials • Third Party Contracts Develop a system to make it easy for you to review, update, preserve and properly dispose of documents. If you are ever challenged, an organized system can mean...

       

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    • Participant Memo: August 2021 – Save Early, Aim for Your Goal

      Contributing to your employer’s retirement plan as soon as you’re eligible is crucial to meeting your retirement goals. The earlier you start saving, the more time compounding interest has to work on your behalf.

       

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