Practice Management

Is Education the Chicken Or the Egg?

By Tom Foster

It’s the “chicken or egg” argument of the retirement plans marketplace.

On one hand, most retirement plan sponsors say they want financial advisors to provide more frequent educational sessions for employees on the value of retirement savings. Nearly one in two (47 percent) plan sponsors who rely on an advisor prefer education sessions to happen twice a year or more, according to research sponsored by MassMutual.1

Yet, many advisors say that sponsors don’t always allow employees to attend educational sessions more than once a year, at most. The dichotomy opens the door for advisors to market their planning services and differentiate themselves from their competitors.

Employers appreciate advisors who develop succinct, effective educational programs that drive employee engagement without draining too much on-the-job productivity. Many providers can help by making available everything from educational modules to tablets that allow employees to enroll in their plan or even increase contributions during group meetings.

So what do sponsors value most when it comes to education? MassMutual’s 2015 Winning Combination Study1 showed that sponsors who relied on an advisor had specific views:

  • 80 percent wanted advisors to explain the available retirement benefits and options;
  • 73 percent preferred educating employees on the importance of saving for retirement;
  • 66 percent favored personalized advice for employees to determine if they are on track for retirement; and
  • 53 percent wanted a special program for pre-retirees or employees who are approaching retirement.

Perhaps the most effective way to convince sponsors to make more time for education is to ask a simple question: “What percentage of your employees is on target to retire with at least 75 percent of their pre-retirement income at age 67?”

If they can’t answer the question – and few employers can – then their educational program might not be as effective as they thought.



Thomas Foster Jr. is Assistant Vice President, Strategy and Relationships, for MassMutual Retirement Services, a division of Massachusetts Mutual Life Insurance Co.

12015 MassMutual Winning Combination Study,

This article is for informational purposes only and should not be construed as legal, investment, and/or tax advice. Please consult your own legal counsel and other experts regarding the specific application of the information set forth herein to your own plan and/or circumstances.