Empower, one of the country’s leading retirement service providers, is taking aim at the US retirement access gap with plans to launch a new digital platform,
Set to launch at midyear, Ready Select is designed to lower the barriers that small employers and start-ups face in offering 401(k) retirement plans to their employees.
The platform, which is geared toward advisors and third-party administrators, promises to simplify the process of establishing a retirement plan for employers, focusing on reducing both complexity and costs for plans with assets up to $1 million, while streamlining administrative tasks.
Empower, which administers an estimated $1.5 trillion in assets for more than 18.5 million investors, is unveiling the platform against the backdrop of continuing challenges for small businesses, which can find it hard to properly address the work of providing retirement benefits on top of growing their business.
Figures from the Small Business Administration hint at a stark picture, with an estimated 33.2 million small businesses – employing some 62 million individuals – representing a large chunk of the current population of workers still in need of workplace retirement plan coverage. Depending on the research, that gap in the private sector represents between 33 percent and 50 percent of workers.
"This game-changing innovation from Empower delivers retirement services to more American workers who deserve the chance to have a secure retirement," Empower president and CEO Edmund F. Murphy III said in a statement.
Rich Linton, also a president of Empower and its chief operating officer, acknowledged the role of public-private partnerships in enhancing the accessibility of retirement plans. Legislative efforts, such as the 2019 SECURE Act and the SECURE 2.0 Act, have laid the groundwork for making retirement plans more accessible, with more families in the lowest-income group getting access to retirement plans after they were introduced.
“We know that through highly effective public policy and on-going investments in innovation we can further reduce employer burdens and take down barriers of entry into the retirement system,” he said.
Ready Select aims to simplify the 401(k) plan setup process with on-demand proposals and complete plan setups, while incorporating integrated investment advisory services through a third-party ERISA fiduciary.
“Advisors and TPAs who use Ready Select will have the ability to help support small employers with cost-effective retirement plan choices that best meets the needs of their workforce,” said Joseph Smolen, executive vice president for core markets at Empower.
Empower anticipates that Ready Select will offer small-business owners and their employees access to a comprehensive digital experience, including financial wellness and education programs.
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