WORTH A LOOK - TRS Collinson, retirement and market trends expert for the Transamerica Center for Retirement
WORTH A LOOK - TRS Collinson, retirement and market trends expert for the Transamerica Center for Retirement
WORTH A LOOK - TRS Collinson, retirement and market trends expert for the Transamerica Center for Retirement
WORTH A LOOK - TRS Collinson, retirement and market trends expert for the Transamerica Center for Retirement

WORTH A LOOK - TRS Collinson, retirement and market trends expert for the Transamerica Center for Retirement

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  • Nearly 60% of employees wantmore information and adviceabout retirement and investing, according to a recent Transamerica1

    survey.2 Sistema Universitario Ana G. Mendez has responded to this request, resulting in positive changes for its plan.

    Background: Sistema Universitario Ana G. Mendez Sistema Universitario Ana G. Mendez (SUAGM) is a university system in San Juan, Puerto Rico, that employs about 1,400 people across three campuses and 13 university centers. Participation in the university’s Employees Savings and Investment Plan has been low. With tough economic conditions in Puerto Rico, SUAGM has found it difficult to motivate employees to participate in

    the Savings and Investment plan.

    Situation: Educate and increase participation Investment education is critical in Puerto Rico. Normally, SUAGM offers regular mini education seminars, but realized they

    needed to provide additional educa- tion to accomplish the following goals: � Increase participation

    � Expand employees’ knowledge and understanding of investing

    � Educate employees about new investment funds

    � Empower employees to take an active role in retirement planning

    Solution: More information and the personal touch Working with Transamerica Retirement Services, SUAGM planned a six-day 401(k) Day event. SUAGM used Transamerica’s payroll stuffers and posters to announce the event and generate excitement around the Savings and Investment Plan. Approximately 250 employees attended and took advantage of:

    � Workshops – Employees attended enrollment workshops to learn more about the enrollment process, and AdviceSolutionsSM workshops to learn how to use Transamerica’s Web-based planning tool.

    � Computer labs – Allowed employees to enroll online and gave Participants access to their accounts to make changes.

    � Computer training – Online Web navigation training walked employees through Transamerica’s enhanced Web site.

    � Seminars – Employees learned about investing basics and the plan’s new

    WORTH A LOOKWORTH A LOOK News & Investment Insights for Retirement Plan Sponsors • Vol. 8/No. 1/Spring 2005

    HOW TO HELP ECHO BOOMERS SAVE2

    NEW RETIREMENT SAVINGS TIPS4

    www.TA-Retirement.com

    Dear Sponsor: Persuading Participants to start saving for retirement is a challenge. In this quarter’s “Sponsor Exchange” we feature Sistema Universitario Ana G. Mendez and highlight their efforts to increase participation in their retirement plan.

    We offer a glimpse into the mindset of Echo Boomers, the youngest employee group in today’s workforce. Using data from the Sixth Annual Transamerica Small Business Retirement Survey, we provide you with recommendations on education and resources that will enable Echo Boomers to plan for retirement.

    In this edition’s “In Focus,” we highlight our new Retirement Savings Tips, developed to enhance your Participant education program and reinforce the benefits of retirement planning.

    And finally, we touch on how you can help Participants defend their retirement savings from inflation.

    Sincerely,

    David Shute Worth A Look Publisher

    Hands-On Education Motivates Employees and Promotes Plans

    HELP GUARD AGAINST INFLATION3

    (Continued on page 4)

    Left to right: Monica Soto, Angie López, Ramon Santiago, Amarilys Perez, and Maritza López

    SPON SOR

    EXCH ANG

    E

    1 Transamerica or Transamerica Retirement Services (TRS) refers to Transamerica Financial Life Insurance Company (TFLIC). TRS markets the products and services of TFLIC and its affiliates.

    2 Sixth Annual Transamerica Small Business Retirement Survey, Transamerica Center for Retirement Studies, 2004.

  • Contrary to popular belief,younger employees do careabout saving for retirement. In fact, according to the Sixth Annual Transamerica Small Business Retirement Survey, 70% of Echo Boomers1 want more information and advice from their employers about retirement planning.

    But, despite their desire to save, participation among Echo Boomers remains low (37%).2 Sponsors have a golden opportunity to provide the education, tools and resources that Echo Boomers crave so they can adequately prepare for retirement and increase participation.

    Focusing on basics reinforces importance of saving early Ninety-three percent of Echo Boomers feel that employer-sponsored retirement plans are a very important benefit, but more than half (63%) don’t think they know enough about their plan to participate.

    “These workers are very concerned about saving and want more information – especially from their employers. It’s important that employers find a way to reach their younger workers through targeted education,” says Catherine Collinson, retirement and market trends expert for the Transamerica Center for Retirement Studies.

    You can get Echo Boomers to focus on retirement if you:

    � Highlight the features and benefits of the retirement plan and explain retirement basics through targeted communication (such as posters or payroll stuffers) or onsite workshops.

    � Encourage the use of Transamerica’s online tools (www.TA-Retirement.com):

    � It’s Payday – illustrates the benefits of tax-deferred investing.

    � Loose Change – shows how a small contribution impacts a paycheck.

    � The Compounding Game – shows how a 1 or 2% contribution increase grows over time.

    Setting realistic savings goals is key Echo Boomers have not accurately determined what they will need to retire – 41% guess, and 26% base

    estimates on current living expenses.2

    In order for Echo Boomers to understand how much they’ll need to save, they must set realistic savings goals. They can assess their needs using additional Transamerica Web site tools:

    � Point, Click and Save!SM helps establish retirement goals and create a plan to start saving.

    � The Asset Allocation Questionnaire defines their investor type, evaluates risk tolerance and determines an appropriate asset allocation mix.

    � AdviceSolutionsSM helps develop an investment strategy.

    � Saving Up helps determine if a savings plan is on track to meet retirement needs.

    In addition, encourage Echo Boomers to read “Put Your Retirement Income Picture Into Focus” in this quarter’s Participant version of Worth A Look to learn how to set realistic goals.

    A little information can go a long way Many Echo Boomers (88%) agree that they do not know as much as they should about retirement investing and the majority (71%) would like to receive more information and advice from their company on how to reach their retirement goals.2 Transamerica’s “Made Simple Series” of seminars provides education on investing and the economy:

    � “Investments Made Simple” – focuses on investing basics, the fundamentals of investing for retirement, and developing investment strategies.

    � “The Economy Made Simple” – takes the mystery out of economics by explaining such concepts as how to spot economic trends and defining Bull and Bear markets.

    You may also want to consider rein- forcing these seminars by pairing them with the new “Retirement Savings Tips” described in this issue’s “In Focus.”

    Give Echo Boomers what they need Now that you know Echo Boomers are truly motivated to save, you have the opportunity to give them the right mix of education, tools and resources to help them plan for the future. “Employers can ensure that their retirement plan-related communication efforts address all of their audiences and not just their older, more experienced workers. Effective communications are key,” says Collinson.

    1 Individuals born between 1979 and 1986. 2 Sixth Annual Transamerica Small Business

    Retirement Survey, Transamerica Center for Retirement Studies, 2004.

    2

    Echo Boomers Want to Save, So How Can You Help Them?

  • Participants need to think aboutbeating inflation since it canerode their retirement savings. They need your help figuring out how much to save, and how to defend against inflation.

    Help Participants figure out what they need Data from a recent study conducted by Aon Consulting and Georgia State University indicates that Participants will need between 75% and 90% of pre-retirement income to live comfortably.1 But, only 42% of workers have tried to calculate what they will need to save to achieve this.2

    Direct Participants to Transamerica’s online calculators to determine retirement savings goals. The calculators automatically factor in an inflation rate, but allow Participants to change that percentage to provide more realistic savings information.

    Educate Participants about investing More than 70% of Participants do not know as much as they should about retirement investing.3 Utilize Transamerica’s comprehensive Participant education and guidance program to provide tools, resources and online workshops. Consider hosting an onsite educational seminar from Transamerica’s Made Simple Series, such as “Investments Made Simple,” which focuses on investing basics, the fundamentals of investing for retirement and developing investment strategies.

    Provide Participants with defenses against inflation Participants will protect their retirement savings from inflation if they:

    � Remain diversified and invest in stock funds – Historically, stocks outperform inflation by more than 7% annually.4

    “Safe” investments, such as U.S. Treasury Bills, barely outpace inflation over time.5 Rem

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