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Products February 19, 2014
A 10% Savings Challenge to Offer Employees
February 19, 2014 (PLANSPONSOR.com) - The Principal Financial Group is issuing a 10% savings challenge to retirement plan participants and a new way to track progress through a Retirement Wellness Report.
Reported by Rebecca Moore
The “Take the 10% Challenge” is an educational campaign that encourages participants to push themselves in the race toward retirement security by deferring at least 10% of their salary annually to retirement savings. Those who accept the challenge are eligible to win a Fitbit Force, a wireless watch-like device that can track and transmit fitness data, to help better monitor related physical fitness goals.
The Principal tells PLANSPONSOR the challenge is offered to anyone who would like to sign up to save 10%, whether they are participants in a plan from The Principal or not. The challenge is also available through The Principal’s participant website. The firm says it is providing a number of materials to employers to help them share this information with their participants.
With the new participant Retirement Wellness Report, The Principal visually shows retirement plan participants whether they are saving enough to reach a successful retirement. The individualized report includes an at-a-glance view of a participant’s estimated monthly retirement income and compares the figure to the income needed each month in retirement. For those with an income gap, simple illustrations show the impact of a deferral increase. Participants with a gap in savings are encouraged to increase their contribution election or sign up for automatic increases to help get them on track.
“By simply showing a projected monthly retirement income, participants can quickly determine if they are really saving enough for retirement,” says Jerry Patterson, senior vice president for retirement and investor services for The Principal. “Learning that a $50,000 balance would amount to only $260 in retirement can be a real wake-up call.”
“Based on our extensive research on savings behavior, we are fundamentally changing our approach with retirement plan participants,” he says. “New tools like the Retirement Wellness Report and the 10% challenge harness the power of human nature to make a significant impact on the health of retirement savings.”
Last year The Principal introduced a retirement readiness report for employers (see “Certain Plan Features Boost Participation”) showing how many of their employees are on track to reach a successful retirement. Part of an wider approach to improving retirement readiness, the new participant and employer reports support Principal PlanWorks (see “Principal Releases Plan Design Service”), which focuses on encouraging participants to save adequately for retirement.