FIRMS WRESTLE WITH HOW TO HELP WORKERS POST-RETIREMENT

That was the question that many attendees were asking at the Pensions & Investments East Coast Defined Contribution Conference, which took place at the PGA Resort in West Palm Beach, Florida, on March 3 and 4.

"What happens after retirement?" asked James Delaplane, a partner at the law firm of Davis & Harman, in his speech opening the conference. "Are you going to take that on?"

The answer, according to many plan sponsors in attendance, seems to be yes. With the aging baby boomers, companies are realizing it's not enough to make sure that employees have enough at retirement. They need to make sure they have enough after that point as well.

"We have focused for 20 years on the accrual stage, but very little on how employees should spend this income," said Gail Nichols, director of compensation, benefits and HR systems at the National Council on Compensation Insurance, speaking during a panel discussion. "Our first wave of retirements is in 2015-2016, and that's right around the corner."

The reason companies want to do this isn't just out of the goodness of their hearts. "We spent a lot of time and effort educating employees about saving for retirement," said Linda Garcia, vice president of HR at Rooms to Go, in an interview at the conference. "If they don't manage their savings well after retirement, then it was all for nothing."

A recent Supreme Court decision may fuel employers' urge to be more paternalistic after employees retire, experts say.

In LaRue v. DeWolff, the Supreme Court unanimously ruled that individual participants in a 401(k) plan can sue their employers over losses, opening up employers to more liability. Companies may be better off trying to help employees manage their income after retirement to make sure it lasts, rather than doing nothing at all and risk employees blaming them, said Scott Cohen, a partner at Montclair, New Jersey-based Bellwether Consulting.

"They have the liability anyway," he said in a brief interview.

The main reason most companies have not added features to their 401 (k) plans to help employees save for retirement is because they are not happy with most of the annuity products in the marketplace. Only 1 percent of companies in a recent Callan Associates survey said they plan to add annuities to their 401(k) plans.

To really address retirees' needs, employers must figure out how they can provide health care to this group, attendees said. Companies could integrate long-term care benefits into their 401 (k) plans, Delaplane suggested during his speech.

As baby boomers retire, employers and consultants expect there will be more products available to address this group's needs, attendees said.

"We no longer have defined-benefit plans, and health care expenses are skyrocketing," Garcia said. "The retirement landscape is completely different than it was 30 years ago."

-Jessica Marquez