The run of stock market losses and the explosion in 401(k) litigation has had a curious effect on plan sponsors: Instead of heading for the bunkers, the response one might anticipate, many companies are choosing to help employees find their way through the financial upheaval. Why? Because in the long run, most are being told it is the best insurance against a whole host of possible rotten outcomes–probably the worst of which from a societal perspective is employees not saving in their 401(k)s at all. "Individuals are making poor decisions that could have a material impact on their retirement security," says Jeff Maggioncalda, president and CEO of Financial Engines, an independent advice provider based in Palo Alto, Calif. "Although there are still some sponsors who believe that it's risky to offer advice, the growing consensus is that it is far more risky to have tens of millions of individuals making poor decisions that could substantially diminish their financial security in the future."

A Gray Workforce

Most employees would probably be shocked to think that companies care whether they have enough for retirement. But the alternative to a healthy nest egg is hanging on to a job well after you've lost the energy or interest to perform it, and companies know well that isn't the road to productivity or innovation. Add to that the problems in Social Security and the impending retirement of the Baby Boom contingent, and a frightening image is conjured up. "What kind of workforce are you going to have if people can't retire?" asks Bill Arnone, a human capital specialist at Ernst & Young. "You don't want to retain workers who mentally retired two years ago and are hanging on because they can't afford not to. It's a massive human capital dilemma."