SHRM26 Debrief · Compensation & Benefits · #3767

Adapting to Change: What Workers Really Need in an Age of Economic Uncertainty

with Esti Buskin

& Constance Hunter

& Brendan McCarthy

▶ Watch on the SHRM portal ~46 min, distilled

401(k) plan designretirement securityhardship withdrawals

"We just can't educate 140 million Americans on basic finance. It's just never going to happen. So you just want to design the system that works for the inert, procrastinating or disengaged."

What it was about

American workers are financially stretched and increasingly raiding their retirement savings to cover near-term costs like healthcare, housing, and hardship. Pensions have largely disappeared, so the responsibility for retirement security has shifted onto employees and, increasingly, back onto employers to fix through better plan design, defaults, and emerging annuity/guaranteed-income options.

By the numbers

70% (1970s) down to under 11% today

share of private-sector American workers covered by a defined-benefit pension plan, then vs. now

71%

of workers are worried they won't have enough retirement savings and will outlive their savings

39%

of workers actually use the AI-powered benefits tools they have access to

Key notes

Design 401(k) plans for the disengaged majority by defaulting to auto-enroll and auto-increase, since most participants will never actively manage their accounts.
Consider adding target-date funds with an embedded annuity option so employees can convert savings into institutionally-priced guaranteed income at retirement, following Vanguard, BlackRock, and Fidelity's lead.
Segment retirement education and engagement by life stage (early career, marriage/529 planning, pre-retirement) rather than using one-size-fits-all communications.

The contrarian takeA properly designed and consistently funded 401(k) plan, invested in the right target-date fund over a full career, will typically leave an employee better off in retirement than a traditional pension would have — despite widespread 'pension envy' and the common belief that pensions are inherently superior.

Take this back Monday

Do this for your team

Check if your 401(k) auto-enrolls and auto-increases by default, since most employees never touch their account settings.

Say this in your next leadership meeting

Pensions are gone, so retirement security has quietly shifted onto us as employers, not just onto employees.

Watch out for

Relying solely on financial education campaigns to change behavior, when most people will never engage no matter how much education is offered.
Treating the 401(k) as a catch-all savings vehicle rather than protecting its original purpose as a pension replacement, which erodes long-term outcomes when employees take loans or hardship withdrawals.
Assuming a pension is automatically better than a well-designed, properly invested 401(k) plan (in most cases the reverse is true if funds aren't raided).

Fun fact · Constance Hunter

Constance Hunter called the 2023 soft landing, 2008's credit crisis, and the 2001 dot-com bust ahead of the curve.

If this landed, see these

↳ Go deeper2026 Annual SHRM Employee Benefits Survey ResultsPuts hard 2026 survey numbers behind the same benefits cost-pressure story this session tells.⇄ The counterpointThe Motivation Advantage with Terry Crews: What It Really Takes to Keep Your People EngagedArgues real financial and personal wellbeing comes from self-care systems, not plan design tweaks.✦ The unexpected oneBuilding an AI-Enabled Recruiting TeamSame 'you already have the tool, just turn it on' logic, applied to auto-enroll defaults instead of AI recruiting.