Two recent surveys indicate that plan sponsors have shifted their attention from simply raising participation rates, to broader and more fundamental topics involving retirement plan participants.
Retirement readiness is high priority
Deloitte’s Annual 401(k) Benchmarking Survey, 2011 Edition found that only 15% of plan sponsors think that most employees will be financially prepared for retirement. About 85% responded that only some or very few employees will be financially secure.
When asked about preparing employees for retirement, approximately two-thirds (64%) indicated that their responsibility includes being interested in whether employees are headed toward a comfortable retirement. Another 20% felt very responsible for preparing their workers for retirement.
Retirement readiness of active participants was rated as very important or quite important by 72% of responding sponsors. Nearly all (92%) said that providing the right investments to help employees reach their retirement goals was very important or quite important.
Compliance concerns are seen
The new fee disclosure regulations were seen as very important or quite important by 71% of sponsors. More than two-thirds also cited improving plan governance and controls as quite important or very important. Nearly 80% rated reducing plan risk and potential fiduciary responsibility, and improving understanding of plan expenses, as highly important.
Another survey adds perspective
Among the 500 employers responding to Aon Hewitt’s 2012 Hot Topics in Retirement survey, confidence in their employees’ retirement success has declined sharply. Only 4% said they were very confident that employees will have sufficient assets when they retire, down sharply from 30% in the previous year’s survey.
Only 10% of sponsors were confident that their employees were accepting accountability for their financial situation in retirement, and fewer than 20% had confidence that workers could manage their income during retirement.
Sponsors plan actions
Nearly half (44%) of responding sponsors said they would concentrate on helping employees retire with adequate financial resources, and about two-thirds (60%) reported that they would focus on assisting their employees with understanding and using the sponsor-provided tools available to them.
Concrete actions include adding an online advice feature (26% of plans) and adding managed accounts (24%). Also, 64% of sponsors said they were likely to add online modeling tools to help employees estimate how much they can spend each year in retirement.
The Deloitte survey is at http://tinyurl.com/Annual401kBenchmarking. Aon Hewitt’s 2012 Hot Topics in Retirement is at http://tinyurl.com/AonHewitt2012HotTopics.