Employees eager for financial guidance and solutions from their employer
BOSTON, Jan 11, 2022 – John Hancock Retirement, a company of Manulife Investment Management, today announced the results of its Stress, Finances, and Well-Being report, the eighth annual survey of its retirement plan participants. As the effects of the pandemic have altered the American workforce in ways that continue to play out, the report is a snapshot of employees’ feelings about their finances and well-being as they continue to manage the impact of a lingering pandemic.
This year’s report showed participant’s confidence in their personal financial situation at a level higher than any time since 2014. However, they also responded that they are seeking help in making money management decisions and showing a desire for guidance and solutions as pandemic fatigue has evolved into decision-making fatigue. This represents a chance for employers, financial professionals, and retirement providers to help retirement savers build a solid foundation for the future.
The value in employer-sponsored retirement plans is broadly acknowledged, with almost all respondents stating it is a critical benefit, including 72% who say it is very critical. What’s more is that 80% of respondents say they would not be likely to work for a company that doesn’t offer a retirement plan.
In Uncertainty, Adopting Positive Financial Behaviors
“Uncertain economic times often cause people to adopt positive financial behaviors in the short-term. This fact, combined with the unique situation of COVID-19 greatly reducing the opportunities to spend money, found many retirement savers in a stronger financial situation than they were pre-pandemic,” said Sue Reibel, CEO, John Hancock Retirement. “There is a clear opportunity for employers to keep this momentum going by offering support to employees to help them make sound investment decisions with confidence, ultimately reducing their financial stress.”
In alignment with participant’s confidence in their personal financial situations, the survey found reduced levels of worry compared to the previous report. This may be correlated to pandemic-related savings – lower commuting, entertainment, leisure, and travel expenses – which has allowed respondents to put that money to work in other areas of their financial lives. However, the 2021 report found that three in four respondents exhibit financial stress at least at a moderate level. Financial stress continues to be prevalent at work as well, with 66% saying they worry about personal finances while on the clock, with nearly half responding that they worry about it on a weekly basis.
“The takeaway of this year’s report is the paradox that we have actually seen improved savings and confidence in personal financial situations in an ongoing pandemic. However, the positive behaviors resulting in this trend have not been fully adopted by participants,” said Lynda Abend, head of strategy & transformation, John Hancock Retirement. “This environment presents a unique opportunity to help people bridge their short-term improvements into actions that will bring them sustainable, long-term financial health.”
Openness To Assistance Is An Opportunity To Help
The opportunity for employers to help their workforce secure their financial future is a potential mitigating factor for the Great Resignation and a means to improve recruitment and retention strategies. Further, the report found that 89% say it’s important for employers to offer financial wellness programs, and 66% said that having access to financial wellness programs would make them more likely to stay with their employer.
Beyond those benefits, the report found that roughly two-thirds of respondents expressed as least moderate interest in receiving recommendations on Social Security strategies and retirement income forecasts from their employers. And 93% said receiving projections on their estimated retirement income and expenses would help them save more.
And with only 37% of respondents saying they have a comprehensive financial plan for retirement the potential impact of offering financial guidance and wellness programs is clear.
Additional key findings from the report include:
- Seventy-one percent of participants have experienced stress, depression, or loneliness during the past year.
- A majority agree that financial concerns add stress to their life; more than 40% report having had stress often/all of the time during the last year.
- The report found a focus on retirement planning (cited by 47%), paying off debt (43%) and ensuring savings are invested wisely (37%) as the top priorities for participants in the coming months.
- Approximately half of the respondents feel they will retire around the time they planned; 20% are unsure when they will be able to retire.
- When it comes to retirement expenses, employees are most worried about healthcare cost, with 68% indicating it is at least somewhat concerning.
The full insights as well as more information about John Hancock Retirement are available online.
About John Hancock Retirement
John Hancock Retirement is the U.S. retirement business of Manulife Investment Management. For nearly 50 years, we’ve helped people plan and invest for retirement; today, we’re one of the largest full-service providers in the United States.1 We take a hands-on consultative approach based on the idea that no two plans – and no two plan participants – are exactly alike. We partner with plan sponsors, financial professionals, and third-party administrators to ensure that every plan is personal to the participant and delivers results.
As of September 30, 2021, John Hancock serviced over 52,000 retirement plans with over 3.1 million participants* and over $220 billion in AUMA.2
*Participant Counts reflect all active participants with a balance.
1. “2020 Defined Contribution Recordkeeper Survey,” PLANSPONSOR, 2020.
2. As of September 30, 2021, John Hancock Life Insurance Company (USA) supported 48,549 plans, 1,605,083 participants, and $ 108,074,132,509.40 in AUMA. John Hancock Life Insurance Company of New York supported 2,568 plans, 77,020 participants, and $ 6,133,181,973.20 in AUMA. John Hancock Retirement Plan Services, LLC supported 1,562 plans, 1,503,715 participants, and $106,615,194,819.75 in AUMA. Participant Counts reflect all active participants with a balance. Approximate unaudited figures for John Hancock, provided on a U.S. statutory basis.
About Manulife Investment Management
Manulife Investment Management is the global brand for the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 18 geographies. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We’re committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement.