Employers Key to Retirement Saving, Study Says

By John Iekel • January 31, 2017 • 0 Comments
Employer-provided retirement plans remain key to retirement saving to a healthy proportion of the employee population, and interest in some aspects of those plans is especially strong, says a recent study.

“The expectation for employer support is increasingly evident,” says American Century Investments (ACI) in “The Keys to the Kingdom: Employees Look to Employers for Answers,” its fourth annual national survey of plan participants. Overall, says ACI, “Employees acknowledge they would be in far worse shape without access to an employer-sponsored plan” and notes that “As participants consider their current circumstances and expectations for the future, nearly all express regret about their personal savings habit, a consistent expression in previous studies and across age groups.” And the employees they surveyed evince support for ways to reduce their regret by increasing their saving.

Key findings include:

  • saving continues to be the area for which employees have the most regret and need the most guidance;

  • participants count on direction and guidance from employers regarding saving and investing for retirement; and

  • participants assign great value to retirement plans as part of compensation and benefits.

Hindsight Is 20/20

The study says that 44% of employees in both age groups they studied — 25-54 and 55-65 — had some regret that they had not done a better job in saving for their retirement. And both groups said that was their greatest regret. Both also said that it is worse to save little and not have enough money for retirement than it is to save too much and lose the opportunity to spend more money now on things they would enjoy.

Please, Sir, I Want Some More


Many more employees in both groups were interested in a nudge from employers to save and invest for retirement than want their employers to leave them alone about it. And in general, employees were more interested in working for employers that offered a retirement plan than for an employer that offered them no employer plan but 5% more pay than an employer that does.

Automatic enrollment and escalation enjoyed strong support. Seventy percent said they believe that employers should set the auto enrollment contribution level at 6%, and the same percentage also has at least some interest in auto increases. Even more impressive, a majority support it to such an extent that they think auto enrollment should be made retroactive.

Good News

The study has plenty of good news regarding retirement saving. More than 90% of employees said that they recognize that they would be better able to handle challenges in retirement if they saved more.

Not only that, the employees studied clearly are very receptive to employer plans and plan options that will help them to do that. “The light at the end of the tunnel appears with participants’ views of their employers,” says ACI.

And that, ACI concludes, bodes well, saying “Employers and their providers have a great opportunity to seize this opportunity to influence their participants’ ability to retire.” Further, it indicates how important employer’ role is in their employees’ financial security in retirement. Says the report, “Employers really do hold the keys to retirement security through their workplace plans, and they have the chance to make a real difference on the livelihood of their employees.”




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