Worried About Retirement

Should colleges and their employees be doing more to encourage savings and better-informed planning?
September 22, 2010

NEW ORLEANS -- In July, TIAA-CREF released a survey of employees in and out of higher education that found those who work for colleges and universities generally have high confidence levels in their retirement savings plans, and that they have more confidence than do the employees of the rest of American society.

While that's good news for academic employers, a discussion of the survey at the annual meeting here of the College and University Professional Association for Human Resources was not congratulatory at all. Rather, the discussion was about a general sense that academics may not be sufficiently informed to make the best decisions about savings (or to realize they have or have not reached their retirement savings needs). Given the concerns at many institutions about whether the economic downturn has delayed retirements, many here said they wanted to be sure that employees were at the very least making informed decisions and, in best-case scenarios, feeling accurately confident about their post-employment finances.

Some of the concerns relate to subsets of academic employees. Ronald Frisch, vice chancellor for human resources at the University of Pittsburgh and one of the presenters, asked the audience if they notice gender patterns in who attends the programs their institutions offer to help employees plan for retirement. Audience members almost uniformly agreed with his view that female employees are much more likely to attend these sessions than are men.

When Frisch asked for theories about why this is the case, given that men should have as much reason to care about retirement budgets as women, most suggested a variation of the theme of men not asking for directions, although one HR manager in the audience (a woman) shouted out that "it's because you guys think you know it all."

Joking aside, Frisch said that the issue is a real one: What should colleges do if they aren't reaching men (or other groups of people)?

Frisch said he worried about how easy it is for people to ignore the electronic statements they receive. He acknowledged that ignoring financial statements is hardly unique to the electronic era, but that people at least in the past let them pile up before opening (or trashing) them, while now it is a simple click of the delete button.

Another group of employees of concern to those here is the youngest cohort. One HR administrator told the group that her institution is considering changing an "opt in" matching program for retirement to an "opt out" program so that employees will have to take an affirmative step not to participate. The reason for the shift, she said, is concern that "otherwise you lose them," she said, referring to younger employees.

The concern that HR officials raised here goes both ways: They want to be sure employees are saving enough (TIAA-CREF is sponsoring a contest on ideas to encourage greater rates of saving) but they also want to have some employees realize that they do have enough money to retire -- so that they do so. Frisch said, to knowing nods in the audience, that everyone in the room has probably talked to faculty members and others who have said "I can't afford to retire," only to have the HR officials show them that they have $2 million in their accounts -- to which the response is, "I do not."

Paul Yakaboski, principal research fellow at the TIAA-CREF Institute, noted that while the survey found general confidence about retirement planning, much of this confidence wasn't certain and wasn't based on having consulted with a financial adviser. There is a lot of "kind of, sort of saving or planning," he said.

In academe, particularly among the faculty ranks, Yakaboski said, there are many who are "do-it-yourself-ers" about financial planning, and he said that means many may not know how much they need to save.

Despite these concerns, both Yakaboski and Frisch said they believed that higher education employees could be more informed about their planning. "We have some of the most intelligent people in the world walking across our campuses, and if you give them the right tools, they can be good stewards," Frisch said.


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