PLANSPONSOR - February/March 2021 - 34

PLAN DESIGN | EDUCATION
Regrowth Factor
Sponsors must restore savers' confidence, to help rebuild their accounts
A
t the beginning of the pandemic,
there was uncertainty and market
volatility. Some workers
panicked when the markets tumbled last
March, going so far as to withdraw their
money, and have been too afraid to buy
back in; since then, they have lost thousands,
or tens of thousands, in retirement
savings. Some employers reduced
or suspended their plan contributions or
matches, as well.
As the year wore on, other monies
leaked out of retirement plans. By last
May 31, 2% of participants at Vanguard
had taken a coronavirus-related distribution
(CRD); 4% of those were for the
maximum of $100,000. And, by year
end, 1.6 million people-i.e., 6.3% of
eligible participants-in 401(k) and
403(b) retirement plans administered
by Fidelity Investments had taken some
money out of their plan.
Employers are acutely aware of the
long-term ramifications of these money
flows and are " experiencing a lot of consternation
about what to do to help employees, "
notes Sandy Pappa, a principal consultant
in the wealth practice of Buck Global LLC,
in Coraopolis, Pennsylvania.
Plan sponsors need to make a multipronged
effort, she and other experts say,
to restore employees' confidence in saving
and encourage them to be mindful of
their long-term future. This will involve
analysis, careful communication and
active, and proactive, measures.
As a first step, Pappa advises
employers to identify which of their
employees the pandemic affected most and
to send them targeted communications.
34 PLANSPONSOR.COM February - March 2021 Art by A Richard Allen
" The first message employers should
underscore is that people need to save
in the plan, " she says. " That will impact
how much retirement income they'll have
when they're ready to retire. "
Messages should stress that every bit
of savings helps and should encourage
workers to increase their savings this
year and next year, agrees Elizabeth
Woodburn, director, engagement, also at
Buck Global, in New York City.
Additionally, messaging needs to
allay employees' fears about market volatility,
Woodburn says. " If employers don't
address this topic, employees won't hear
anything else they have to say, " she says.
" Speak to them about how markets have
behaved and bounced back after other
crises. Recordkeepers can help plan
sponsors with the statistics. "

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PLANSPONSOR - February/March 2021

Table of Contents for the Digital Edition of PLANSPONSOR - February/March 2021

Service for a Crowd
2020 PLANSPONSOR Best in Class 401(k) Plans
Shelter From a Storm
From Volatility to Stability
Are Annuities Good for All?
Regrowth Factor
When 'Herding' Helps
PLANSPONSOR - February/March 2021 - Cover1
PLANSPONSOR - February/March 2021 - Cover2
PLANSPONSOR - February/March 2021 - 1
PLANSPONSOR - February/March 2021 - 2
PLANSPONSOR - February/March 2021 - 3
PLANSPONSOR - February/March 2021 - 4
PLANSPONSOR - February/March 2021 - 5
PLANSPONSOR - February/March 2021 - 6
PLANSPONSOR - February/March 2021 - 7
PLANSPONSOR - February/March 2021 - 8
PLANSPONSOR - February/March 2021 - 9
PLANSPONSOR - February/March 2021 - 10
PLANSPONSOR - February/March 2021 - 11
PLANSPONSOR - February/March 2021 - 12
PLANSPONSOR - February/March 2021 - 13
PLANSPONSOR - February/March 2021 - Service for a Crowd
PLANSPONSOR - February/March 2021 - 15
PLANSPONSOR - February/March 2021 - 16
PLANSPONSOR - February/March 2021 - 17
PLANSPONSOR - February/March 2021 - 18
PLANSPONSOR - February/March 2021 - 19
PLANSPONSOR - February/March 2021 - 2020 PLANSPONSOR Best in Class 401(k) Plans
PLANSPONSOR - February/March 2021 - 21
PLANSPONSOR - February/March 2021 - 22
PLANSPONSOR - February/March 2021 - 23
PLANSPONSOR - February/March 2021 - 24
PLANSPONSOR - February/March 2021 - 25
PLANSPONSOR - February/March 2021 - Shelter From a Storm
PLANSPONSOR - February/March 2021 - 27
PLANSPONSOR - February/March 2021 - From Volatility to Stability
PLANSPONSOR - February/March 2021 - 29
PLANSPONSOR - February/March 2021 - 30
PLANSPONSOR - February/March 2021 - 31
PLANSPONSOR - February/March 2021 - Are Annuities Good for All?
PLANSPONSOR - February/March 2021 - 33
PLANSPONSOR - February/March 2021 - Regrowth Factor
PLANSPONSOR - February/March 2021 - 35
PLANSPONSOR - February/March 2021 - When 'Herding' Helps
PLANSPONSOR - February/March 2021 - 37
PLANSPONSOR - February/March 2021 - 38
PLANSPONSOR - February/March 2021 - 39
PLANSPONSOR - February/March 2021 - 40
PLANSPONSOR - February/March 2021 - Cover3
PLANSPONSOR - February/March 2021 - Cover4
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https://www.plansponsordigital.com/plansponsor/august_september_2021
https://www.plansponsordigital.com/plansponsor/june_july_2021
https://www.plansponsordigital.com/plansponsor/april-may_2021
https://www.plansponsordigital.com/plansponsor/february-march_2021
https://www.plansponsordigital.com/plansponsor/december-january_2021
https://www.plansponsordigital.com/plansponsor/october-november_2020
https://www.plansponsordigital.com/plansponsor/august-september_2020
https://www.plansponsordigital.com/plansponsor/june-july_2020
https://www.plansponsordigital.com/plansponsor/april-may_2020
https://www.plansponsordigital.com/plansponsor/february-march_2020
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https://www.plansponsordigital.com/plansponsor/february-march_2019
https://www.plansponsordigital.com/plansponsor/december_2018-january_2019
https://www.plansponsordigital.com/plansponsor/october-november_2018
https://www.plansponsordigital.com/plansponsor/august-september_2018
https://www.plansponsordigital.com/plansponsor/june-july_2018
https://www.plansponsordigital.com/plansponsor/april-may_2018
https://www.plansponsordigital.com/plansponsor/february-march_2018
https://www.plansponsordigital.com/plansponsor/december_2017-january_2018
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