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Not your father’s retirement plan
KEEPING GEN Y’S BEST AND BRIGHTEST ON YOUR PAYROLL MEANS GIVING THEM WHAT THEY REALLY WANT: A COMFORTABLE RETIREMENT
Once deemed ego-driven, Internet addicts hungry for praise, millennials are working their ways up into workplace hierarchies, and will represent 75% of the workforce by 2028. For employers hoping to keep the job-hopping generation long-term, giving them what they crave—a progressive retirement plan—is key.
“They’re starting to see their parents retiring now and thinking, ‘My parents weren’t huge spenders when they were younger and I am. Am I going to be financially worse off if I don’t start saving now?’” says Mike Moores, vice-president of group savings, insurance and investment at Dartmouth, N.S.-based Belmont Health and Wealth.
The short answer is yes, but Gen Y’s unease about the future presents an opportunity for employers to build company loyalty by offering savings plans that grow with young employees.
Hosting mandatory retirement planning seminars with the assistance of a professional advisor can help address this challenge. “We often see the same people coming to voluntary sessions. That’s great, but the people who aren’t coming are often the ones who need it most,” says Moores.
A progressive and transparent matching formula can also help. Many plans start with both the employee and employers contributing 3% of the employee’s salary, for example. While some remain constant, others increase employer contribution with years of service. Moores believes understanding how contributions will grow over time helps employees envision a future with this company.
“When an employer goes the extra mile to explain the details and introduce professional advisors who are linked to a plan, that’s where recruits see that this employer really cares. That’s the difference,” he says.