Retirement Plan Tools and Resources in the Face of a Volatile Market

The stock market sell-off and economic downturn during the first quarter due to the spread of COVID-19 (coronavirus) has been rapid and unprecedented as it relates to the total disruption felt around the world.

Corporations, government entities and schools have been forced to take action on multiple fronts and in very short order. Many Americans are now working and schooling remotely from their homes. For those industries where it is not feasible to have such work arrangements and whose businesses were forced to shut down operations, the process of massive furloughing and layoffs has begun. Additionally, federal, state and local governments have taken aggressive measures to enforce social distancing in an effort to contain the spread of COVID-19 and flatten the curve.

Though the extreme nature and speed with which the economy has plummeted in connection with the global pandemic is unique, the market’s reaction is very similar to what we faced when the tech bubble burst in 2000, followed by the terrorist attacks on 9/11 and most recently during the financial crisis, or what has been termed the “Great Recession.”

One thing we regularly talk about in meetings with our clients is that the financial markets hate uncertainty.

Until the pandemic is under control, and companies get back to business as usual, we will continue to see significant market volatility and likely continued pressure on stocks and the economy.

In the meantime, what can you do as an employer to support employees participating in your company’s 401(k) plan?

• Leverage your 401(k) provider for the many articles, white papers and flyers they have produced.
• Educate employees in dire financial situations on their loan and in-service withdrawal options.
• Provide appropriate communication and educational resources to all employees.
• Through solid messaging, encourage being a long-term investor, adhering to a sound investment strategy and continuing to invest each pay period.
• Make employees aware of the variety of advice solutions offered through their 401(k) provider and through your retirement plan advisor.

During tough economic times when resources are stretched, turnkey communications and materials available through your 401(k) provider often are overlooked and go underutilized.

Whether helpful information is geared more toward legislative changes that give your employees access to much needed cash or toward reinforcing prudent investment behavior, plan sponsors should take advantage of the many cost-effective resources available to them.

Additionally, utilize the support of your retirement plan advisor to help strategize, coordinate and implement an effective game plan to better help your company support this valued benefit throughout such a trying time.

For more information on the important steps businesses should take during this uncertain time, visit our  OneDigital Coronavirus Advisory Hub, or reach out to your local OneDigital advisory team.

Investment Advice offered through Resources Investment Advisors LLC, (d/b/a OneDigital Investment Advisors) an SEC-registered investment adviser and wholly owned subsidiary of OneDigital.