Tip of the Day

Take stock (no pun intended) of your retirement plan(s).

Whether you offer a DB, DC, ESOP, NQDC retirement plan or all of the above, the market downturn no doubt has done a number on your returns. Principal Financial Group offers a guide to help you regroup and recoup. Read it here.

Tip of the Day

In a word, duck! A finger of blame may be pointing your way. A recent article in the Las Vegas Business Press reports that employees angry over their 401(k) losses from the stock market freefall will be "looking for someone to blame," and that someone may be employers.

Since we want to leave you with more of a tip today than "duck," read the full LVBP article on how to approach financial education for employees amid the economic downturn, and a recent EBA report on how HR/benefits pros are taking action to shield employees from greater financial pain through benefit programs.

Scone: What about my money?

No matter your opinion on who’s to blame for the current financial crisis, the pending bailout legislation and which of the two presidential candidates can best lead us out of this economic turmoil, there is one issue I believe we all can agree on: We need to protect our retirement savings.

Your employees may have started asking you about the safety of their 401(k) assets, and if they haven’t, they likely soon will. I know that was my first consideration after the rollercoaster that has been the last week. No matter who got what in the bailout deal for Wall St., I wanted to know: What about my money?

I don’t even have a great deal of retirement savings accumulated in my 401(k), and I’m more than 30 years away from retirement. But knowing how important those assets will be to my financial future, my interest in the current stock market crisis was protecting my nest egg.

Your employees are no different, and they need to hear from you – right now – on how to take the appropriate steps to secure their retirement in terms of the new financial reality we’re faced with.

Now, I know the last thing employers want to do is tell someone how to manage their money -- for legal reasons, of course, as well as the fact that benefit managers may have the exact same questions as the people looking to them for guidance.

So, I encourage you to seek the counsel of your company’s 401(k) provider. Tell them it is paramount that they distribute new communications that address plan participants’ concerns, and make financial advisors available – ideally in person – to listen and answer questions.

If you can’t do that, at the very least view and distribute to employees this article and video from ABC News, anchored by the network’s personal finance expert Mellody Hobson. In addition to being contagiously upbeat and calming, Hobson lays out in plain English five key tips 401(k) participants “must know” about their accounts and how to manage them through this crisis. She also wrote a related piece on how people should handle their investments in general. They are both outstanding.

This is a delicate moment in our nation’s financial history. We all know that nationally, about 80% of eligible workers contribute to a 401(k), and those that do generally don’t contribute enough. Less than a majority of small businesses, although they employ a majority of the nation’s workforce, offer a retirement plan at all. And now, workers that do contribute are facing significant losses. Although these are difficult, and somewhat scary, economic times we find ourselves in, we cannot slide further behind in terms of retirement readiness. I urge you to do your part.

While history likely won’t note whether or not executives at the currently troubled firms received enormous golden parachutes, it will judge whether ordinary Americans were allowed to crash to the ground, armed without even the basic parachute of sound advice and guidance.

News You Can Use: Easing employees’ market jitters

The market is in turmoil with no end in sight, which no doubt is raising questions and anxiety among employees.

If you don’t send routine communications to your employees (clients) on the health of your (their) retirement plan, now is a good time to consider doing so. An example of a great communications piece is an e-mail sent this week by Reliance Trust Company, a custodian to some 15,000 401(k) plans.

Entitled “A view of the current market – where we are, what we are doing and what we think,” the memo to clients and Reliance employees recaps the market situation in the wake of the Lehman Brothers bankruptcy, details the company’s response and offers advice to investors on what to do now.

“In a turbulent market, it’s good to periodically speak out on what’s going on and why you think it’s going on,” says Tony Greene, Reliance’s senior vice president. “The communication today directly addressed people’s biggest concern – the Lehman failure – and the global concerns people may have about general market movement. We also [underscored] that these types of times are why in good times you do balance portfolio strategies.”

While Greene acknowledges that plan sponsors’ communication philosophies differ, he sums up Reliance’s this way: “We think it’s better to tell people what’s going on, why you think it’s happening, and what the impact may be. It’s always good to communicate where you are and why decision made.”