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Shift away from traditional pensions brings new retirement planning tools


The ongoing shift from defined benefit retirement plans to defined contribution plans has helped spur an improved array of retirement planning tools for benefits managers.

Many tools are provided by employee benefits brokers.

“Most of the technology is driven by the record-keeping aspects of retirement plans,” said Christopher Reagan, Chicago-based senior managing director, practice leader of the retirement plan advisory unit of Mesirow Financial Holdings Inc.

To augment the record-keeping systems, many employee benefits brokers offer web-based tools that help retirement plan sponsors track variables such as employee salaries, account balances and demographic information, as well as model a variety of financial scenarios from that data.

Winfield Evens, Chicago-based director of outsourcing investment strategy at Aon Hewitt, said the human resources and benefits administration consultant recently unveiled a Web-based tool for its defined contribution record-keeping clients.

Known as DC Nexus, the tool acts as an exchange for plan sponsors to obtain pricing information on competing investment alternatives, including multiple investment vehicles and institutional fund options. The goal is to provide users with greater fee transparency and control over plan expenses, Mr. Evens said, noting that the tool makes use of both internal and external data and synthesizes it.


“We realized that there is an opportunity to take the information we have as a plan record keeper, where we are keeping track of individual account activity, and leverage that data for our clients,” Mr. Evens said.

Andrew Yerre, Norwood, Mass.-based partner and employee benefits administration leader at Mercer L.L.C., said the consultant provides two primary Web-based retirement planning tools to help plan sponsors better manage their defined contribution plans.

One of the tools, MyView, is a retirement adequacy modeling tool launched in 2009. Accessed through a secure website, MyView enables users to modify assumptions such as retirement age and rate of savings, and presents modeling results graphically in a dashboard setting. The tool also includes analytic functions that help plan sponsors discern engagement levels among employees.

For example, plan sponsors can check to determine if workers regularly use the planning tools on the company's website or if they use them only occasionally to check their 401(k) balance, he said.

“These tools can help you know how many people are participating and what they actually do on your website,” Mr. Yerre said.

Arresting visuals are at the heart of another retirement planning tool Mercer provides.


The site, uncoverthenumbers.com, uses aspects of “gamification,” such as quizzes to improve employee engagement, as well as video to help educate plan users. The purpose of the site is to get the ultimate users of retirement plans workers to think about the concept of retirement more often than the one time a year when they rebalance their 401(k) investment portfolio, Mr. Yerre said.

“It's an engagement teaser,” he said. “Half of the battle is getting people to take a vested interest in their own retirement plan.”

Better technology is necessary given the complexity of the task facing employee benefits managers, Mr. Reagan said.

“Everybody is getting asked to do more with less as the plans are getting more complicated and staffs are not getting any larger,” he said.

Bill Kline, Raleigh-Durham, N.C.-based national practice leader of retirement services at Arthur J. Gallagher & Co., agreed that use of technology is imperative, but he also said brokers still need to fuse technology with a broader array of consulting services.

“Our role is to be an extension of their staff and help them size up record-keeping platforms and investment offerings to come up with the optimal offerings for plan participants,” Mr. Kline said.