Employers Say Readiness Is Key For Successful Retirement Benefits Program
WINDSOR, Conn., April 2, 2014 — Seventy-four percent of employers who offer a defined contribution plan in the United States believe their employees' retirement readiness is an important measure on whether their current retirement benefits program is a success.
"When you consider that 80 percent of full-time U.S. workers rely on an employer-sponsored retirement savings plan to support their future retirement lifestyle1, it is encouraging to see so many plan sponsors understand how integral their retirement benefits are to their workers' ability to achieve a financially secure retirement, ," said Alison Salka, corporate vice president and LIMRA SRI Research director. "In the past, plan sponsors focused on their employees' participation and contribution rates with little attention to the how the employee will use these assets in retirement. But as more employees rely primarily on their DC assets to fund their retirement, our industry has been communicating the need to offer their employees options for de-accumulation phase as well to truly prepare their employees for retirement."
LIMRA SRI research found that nearly a quarter of plan sponsors do not offer a retirement income option within their retirement savings plan and half believe there is no demand for these products. However, prior LIMRA SRI research found that employees overwhelmingly wanted access to retirement income products within their plan, with 8 in 10 workers agreeing that employers should provide ways to convert savings into retirement income.
In the study, employers cited the most important issues driving their retirement benefits strategy decisions. The top three issues were helping employees save enough for retirement (38 percent); being competitive to attract quality employees (19 percent); and increasing costs of non-retirement benefits (14 percent).
To learn more about the results of the survey, plan on attending the 2014 Retirement Industry Conference where Alison Salka will share findings at the Retirement Priorities and Challenges: Plan Sponsor Perspectives workshop.
1 2013 Investment Company Fact Book