Short-term thinking leads employers and employees to overlook existing programs and tools that could provide employees with sound retirement planning advice, Dallas Salisbury, president and CEO of the Employee Benefit Research Institute, said during a meeting today of the ERISA Advisory Councils working group on financial literacy and the role of the employer.
The reality is that most plan sponsors do not provide them (retirement planning programs and tools), many financial planners do not provide them, and even when they are made available, most individuals do not take advantage of them, according to the text of his remarks. Whether it be profit cycles, pay periods or credit card payment cycles, the short term dominates over intermediate or long-term planning.
But providing additional incentives for plan sponsors isnt likely to translate into increased financial literacy of employees. The primary problem is worker behavior (or lack thereof), not employer behavior, Mr. Salisbury said. Cash payments to employees or an additional contribution, however, might spur employees to improve their planning for retirement, he added.