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Wisdom at work

Real consultants answer real questions from real employers.

Read time: 5 minutes

Many of us are big fans of advice columns—from Dear Abby and Miss Manners up through the myriad of websites advising on sometimes remarkably specific topics. But to our knowledge, there’s no obliging sage dedicated to the retirement industry.

So TIAA TMRW is filling that gap with a new feature, “Ask a consultant.”

It’s simple: Retirement industry consultants will answer real questions from real employers regarding real retirement plans. We anonymize the questions and strip out any plan details before  engaging with the consultants. We hope these conversations between plan sponsors and consultants provide fresh perspectives on your burning retirement plan questions. 

All exchanges were edited for clarity, brevity and context. 

Ask a consultant

AI and retirement plans

How will artificial intelligence (AI) enhance—not replace!— consultants and advisors? Will there be better modeling, results or recommendations?

The biggest opportunity for AI is in employee engagement, perhaps even more than [investment] modeling. 

One of the biggest challenges in employee engagement is making it relevant. Helping employees make better decisions requires customizing the message to their needs. Right now, that’s hard. 

If you think about AI as the mechanism for creating more customized experiences, that could drive higher engagement and ideally better decisions. Even using AI to include a participant’s name in every interaction could create a connection.

Down the line, I can imagine applying AI to create 70-year-old versions of ourselves who tell us what retirement looks like, and how our decisions today can make a difference in the long run. 

When I was early in my career, I worked in participant education where I met with employees regularly. I’d ask them to imagine their retirements. I described my own retirement vision — a house with views of the mountain tops and a double-sided fireplace in the center of a great room. 

Today, I can imagine an AI-generated version of my 70-year-old self, talking to me about that double-sided fireplace and how contributing $50 more per week would help me get there. 

These conversations and interactions could also generate valuable data for the plan sponsor. Imagine if AI could ask, “What’s keeping you up at night?” If most people talked about budget and debt concerns, that data could help plan sponsors respond better to employees’ needs. 

Naturally, there would be a lot of data integrity and privacy concerns. But we are many years away from using AI for this kind of engagement. That’s why it’s important to think ahead and get our data in good order so we’re in a strong position to leverage AI effectively when we get there. 

Ask a consultant

Next-gen retirement plan design

Employers have gained more control over employees’ retirement contributions through auto-enrollment and escalation. Are other tools on the horizon for employers to further stimulate retirement savings?

I see features like automatic enrollment and auto-escalation as less about control and more about the increased potential for employers to help employees through enhanced plan design. 

I expect plan design will only improve going forward. Thanks to SECURE 1.0 and SECURE 2.0,  employers have much more at their disposal to create better saving opportunities, and we will see greater adoption of many of these new provisions. 

Student loan payment matching, increased saving potential with Roth accounts, emergency savings withdrawals, opening plans to include long-term, part-time employees—all create the means for employees to save more effectively. These are wonderful opportunities for employees made possible through plan design.

Going forward, more states likely will enact legislation requiring employers without retirement plans to enroll employees in state-sponsored programs.

We may see additional incentives encouraging small businesses to start their own retirement plans. Considering nearly half of U.S. workers are employed by small businesses1, there’s a significant need to help these employees save for retirement.

We also will likely see more requirements mandating the use of automatic enrollment and escalation features in retirement plans.

Of course, we need to evaluate any plan design change carefully to make sure it fits with the employer’s goals and resources, but I’m very optimistic about what the future holds for employees and their retirement readiness.  

For more on TIAA’s latest thinking on SECURE 2.0, visit our online resource center.

Ask a consultant

Effective employee engagement 

What is the best way to drive employee engagement and education around our retirement plan?

In most nonprofit organizations, there’s a broad age spectrum. That’s true in healthcare but it’s especially true in higher education, where the range can vary from a 25-year-old staff person to a 75-year-old faculty member still teaching and publishing research. It’s hard to solve for that entire spectrum.  

Instead, focus on who you want to engage and how. An individual’s relationship with their retirement benefits becomes much more personalized as they age. 

At 25 or 30 years old, their needs are much more homogenous—saving and investing for growth. The issue at that age is disengagement. 

Applying systematic solutions [like automatic enrollment with default investments and auto-escalation] to create robust contribution strategies and investment allocations for younger workers uses inertia to their advantage. 

That frees up mindshare for those approaching retirement—those in their 50s and older and for whom retirement benefits become more nuanced and individualized. 

That’s where you can have a different kind of impact. What kind of income do they need? What kind of planning calculator do they need? 

If you're a benefits manager, give yourself permission to focus on the group that’s closer to retirement rather than overwhelming yourself with the entire spectrum. If you do that, you can shrink the world into more solvable problems.

If you manage a retirement plan and have a question for “Ask a consultant,” email us at TMRWpublication@tiaa.orgOpens Email.

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1 U.S. Small Business Administration Office of Advocacy, 2023.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. TIAA and the consultants, or any of their affiliates or subsidiaries are not affiliated with or in any way related to each other.