Designing Retirement Plans That Support Engineering Professionals
An attractive total compensation package — including retirement benefits — can be the key to mitigating turnover issues. With a shortage of highly skilled candidates, engineering firms may need to rethink the appeal of their retirement plans.
The engineering industry is on track for significant growth, creating vast employment opportunities. However, fierce competition for talent and a shortage of qualified workers can throw a wrench in those plans.
Engineering professionals juggle heavy workloads, navigating a maze of complex projects. Yet only 46% feel highly engaged in their work, and 55% would change jobs in the next 12 months for a new opportunity.
Workers are seeking a greater work/life balance, flexibility and a competitive total compensation package to stick around longer. The solution lies in creating a workplace that values and supports these needs. Yet, too many engineering firms fail to communicate the value of their retirement plan as part of that total compensation package.
If your plan isn't as effective as you'd like, consider how you're handling these three challenges:
Challenge #1: Not offering financial education resources to plan participants.
Everyday financial decisions can impact workers' financial wellness. And they're looking to their employers for knowledge and support.
While 63% of plan sponsors believe they are responsible for helping employees with their financial wellness, 26% don't have a financial wellness program and 35% offer no financial wellness education. As a result of this disconnect, employees often struggle with debt, saving for emergencies and other financial hardships.
Challenge #2: Not understanding fiduciary responsibilities.
It's the responsibility of plan fiduciaries to select and monitor plan investments to ensure they're appropriate for their participant base and fees are reasonable. But plan sponsors may be falling short of their obligations. Ninety percent work with a retirement plan advisor or institutional investment consultant, but not all provide fiduciary services. Consider working with a third-party investment fiduciary to help you mitigate your fiduciary risk.
Challenge #3: Failing to actively increase plan participation and utilization.
There's a direct correlation between employee satisfaction and employer benefits. However, only 61% of retirement plans allow Roth contributions. Forty-six percent don't offer automated enrollment. When your plan options don't match up with employee expectations to help make participation effortless, your plan health suffers.
Creating a plan that does more
Support your engineering professionals' personal and financial well-being with a strong retirement plan. ADP can help you design a plan to best meet the needs of your business and your workforce — and make it easier to manage, too:
- Implement valuable features, including auto enroll and automatic deferral increases
- Access data and insights to keep everyone in control of saving for retirement
- Leverage a knowledgeable education team that's available for live virtual enrollment and ongoing education sessions
- Protect employee data with industry-recognized security and risk mitigation
Learn how ADP can help you design a more effective retirement plan.
For more information, reach out to an ADP retirement specialist at 1-800-432-401K or visit adp.com/401k.
ADP, Inc., and its affiliates do not offer investment, tax, or legal advice to individuals. Nothing contained in this article is intended to be, nor should be construed as, particularized advice or a recommendation or suggestion that you take or not take a particular action. Questions about how laws, regulations, guidance, your plan's provisions, or services available to participants may apply to you should be directed to your plan administrator or legal, tax or financial advisor. M-478294-2024-01-10
