LINCOLNSHIRE, Ill., Jan. 14, 2015 /PRNewswire/ -- As employers expand their focus on the overall financial well-being of their workers, a new survey from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), reveals that an increasing number of companies are broadening the types of financial and retirement planning tools and resources they provide to workers. Employers are also taking advantage of the size and purchasing power of their defined contribution (DC) plans to reduce costs and improve returns for employees.
According to Aon Hewitt's survey of nearly 250 U.S. employers representing approximately six million employees, 93 percent intend to focus on the financial well-being of their employees in a way that extends beyond retirement. Nearly half (46 percent) are very likely and another 47 percent are somewhat likely to add new plan features, mobile apps or online tools to assist individuals with understanding financial concepts and financial planning.
Additionally, more employers are offering tools and resources to help boost retirement savings:
- 69 percent currently offer online investment guidance, up from 56 percent in 2014, and 18 percent of the remaining employers are very likely to add this feature in 2015.
- More than half (53 percent) offer phone access to financial advisors in 2015, up from just over a third (35 percent) in 2014.
- Approximately half (49 percent) offer third-party investment advice, up slightly from 44 percent in 2014
- 47 percent offer managed accounts, up 8 percentage points from 2014.
"Employers' focus on financial wellness has been steadily picking up steam in recent years. This year, even more organizations will address this topic head-on and help workers think beyond just saving enough for retirement and consider all aspects of their financial health," said Rob Austin, director of Retirement Research at Aon Hewitt. "Depending on the individual needs of their employee populations, companies are offering features like basic budgeting help, while others are providing assistance on how to save for life events like a home purchase or college."
Reducing costs for workers
Aon Hewitt's survey also found that companies are more carefully reviewing the costs associated with their DC plans and are using their scale and purchasing power to make changes that may improve returns for workers. More than one third (34 percent) of employers recently made changes to their fund line-ups to reduce plan costs, compared to 27 percent in 2014. Of those employers that have not yet made this change, 34 percent are very likely to do so before the end of the 2015. Additionally, the percentage of employers that have recently moved from mutual funds to institutional funds or separately managed accounts has almost doubled, from 16 percent a year ago to 30 percent today.
"Employers understand that small plan fees can add up and ultimately make a big impact on workers' retirement savings," explained Austin. "To help workers' maximize their retirement dollars, employers are scrutinizing each fund in the plan to determine if the associated fees are reasonable."
Aon Hewitt's Hot Topics in Retirement report can be found here.
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About Aon Hewitt
Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit www.aonhewitt.com.
Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, best reinsurance intermediary, best captives manager, and best employee benefits consulting firm by multiple industry sources. Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aon's global partnership with Manchester United.
SOURCE Aon plc