03 September 2014

Fidelity unveils retirement planning tools

06 March 2014  |  968 views  |  0 Source: Fidelity Investments

Fidelity Investments today announces the first phase of a comprehensive suite of innovative tools and technologies developed to help thousands of American employers and millions of employees make better retirement planning decisions and ultimately try to help them achieve better retirement outcomes.

Fidelity's new technologies enable employers to measure the effectiveness of their workplace savings plans and analyze savings behavior among their employees, as well as help employees make decisions when it comes to their retirement savings choices.

As the workplace savings plan has become the primary retirement savings vehicle for an increasing number of American workers, organizations continue to struggle to find ways to break employee inertia and help their workforce make the best decisions when it comes to retirement savings. Fidelity research indicates that 72 percent of employers ranked "low employee savings" as one of their biggest concerns, and more than half cited the need to address frequent loans and hardship withdrawals by employees1. Additional Fidelity research2 found that nearly half of workers surveyed feel they don't have the knowledge to make decisions when it comes to saving for retirement; and among workers under the age of 30, more than half have not enrolled in their workplace savings plan3.

"Employers want insight on how to improve their savings plan, but it is no longer enough to simply provide average account balances and basic metrics - employers want meaningful, detailed data that can help them analyze the performance of their savings plan and help ensure their workforce is making the right decisions," said James MacDonald, president of Workplace Investing at Fidelity. "These products are built on Fidelity's tremendous volume of retirement planning data, which gives our clients and their employees a level of analysis they can't get from any other organization. We are confident these new products will set the standard for the industry."

For employers: Products providing insights to optimize plan design

Two of the new capabilities will provide employers with deep insights on employee behavior within their workplace savings plan. This will help employers to measure the effectiveness of their plan, provide peer benchmarks and analyze employees' savings and investing behaviors. In addition, these products will help employers identify which employee segments may not be taking action to prepare for retirement.

  • Executive Insights helps address three primary concerns for employers - what is my workplace plan designed to produce; how is it performing; and what are the areas in need of attention? This new platform allows employers to determine the full potential of their savings plan through the ability to use patent-pending tools to view and model potential income replacement rates that various plan designs could yield. Plan performance data is presented in a "dashboard" format that displays aggregated employee behavior metrics such as participation rates, savings levels, asset allocations, and withdrawal activity. Employers can use the insights gained to target employee populations that may need guidance in a specific area, as well as encouraging employees who are on track. Executive Insights has been available in limited markets, but is now generally available to all of Fidelity's 20,000+ plan sponsors.
  • The On Plan Indicator is Fidelity's new metric to help employers determine if their employees are saving enough and investing appropriately with respect to equities for their age. This indicator will track the percentage of employees saving a total of 10 percent or more and who are invested with an age-based equity allocation. The On Plan Indicator will be available to employers in Spring 2014.

For employees: New tools streamline enrollment and help employees stay on track

A significant challenge for organizations today is ensuring that all eligible employees are participating in their workplace savings plan, monitoring their progress, and making better decisions toward advancing their retirement savings goals. Fidelity has launched a simplified way for employees to enroll in their workplace savings plans in a matter of minutes, and has also introduced a new report to help employees understand whether their retirement savings are on track.

  • The Easy Enroll and Easy Savings program simplifies the enrollment process by allowing employees to join their workplace savings plan with just two clicks, using a smartphone, tablet or desktop. This new offering, which is also patent pending, allows employees to select from one of three suggested savings rates and invests in a specific fund. The program also automatically increases their savings rate by one percent annually. Easy Enroll and Easy Savings will be available in Summer 2014.
  • The Personal Progress Report provides employees with a "snapshot" of their retirement plan across three critical areas - how much they're saving, how their savings is invested, and whether they are on track to hit their long-term savings goals. The assessment also suggests next steps for employees who feel the need to make some changes, and then allows them to take action with the click of a mouse. The Personal Progress Report is available now.

Comprehensive Guidance and Education for all customers

Fidelity offers education to all investors. Employees have access to educational help at every stage of their career via the Plan for Life experience. The organization provides guidance through easy-to-understand online tools, from telephone representatives, smartphones and tablets, workshops, in addition to support at our more than 180 investor centers nationwide. It also posts education to its NetBenefits® Library for workplace plan employees, as well as Viewpoints on Fidelity.com about market insights, investing ideas, trading and personal finance. 

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