Looking ahead to developments for retirement plans this year, Pete Welsh, head of retirement plan services at Millennium Trust, tells PLANSPONSOR that there’s a growing appetite to make sure more people have access to retirement plans.

“Federal and state governments will continue to look for ways—including additional state mandates or, perhaps, federal legislation—to cover the 44 million Americans who do not have a workplace savings option,” he says. “This number has largely held consistent for years. The challenge is that they haven’t been overly successful. Nonetheless, the states are going to continue down this path and refine how they do it by scrutinizing what is working.”

Because the majority of Americans would not be able to cover a sudden $400 emergency expense, and because the COVID-19 pandemic with all its furloughs and layoffs exposed this weakness, Welsh says he expects more employers to offer emergency savings programs in which a small portion of each employee’s salary is squirreled away every pay period.

“The COVID-19 virus has made emergency savings more topical,” he says. “The workplace is the best place to have payroll deductions taken out. I foresee emergency savings emerging as an employee benefit in 2021. The pandemic has made it clear, to both employers and employees, the importance of saving for emergencies in addition to retirement.”

Millennium Trust also expects employers to make more of an effort this year to boost employee engagement not just with retirement plans but with all of their benefit offerings, Welsh says.

“This can be done in a number of ways, from educating employees on how to use and invest in a health savings account (HSA), to promoting the retirement plan, to offering financial wellness programs,” Welsh says. In particular, Walsh expects employers to underscore the importance of having emergency savings.

He also says offering these services digitally is inadequate, and employers need to make financial advisers available to employees. “Human interaction is key,” Welsh says. “Otherwise, employees fail to engage properly with their retirement plan and other benefits,” he maintains.

Welsh says employers can help their workers “save smarter for retirement,” by “ensuring people are at least saving enough to receive their employer’s full 401(k) match, but also that they understand the benefits of HSAs.”