The research also finds that among those who would stay in the plan, higher default deferral rates result in respondents settling on a higher contribution rate.
These findings are contained in new research conducted by the
The survey assesses public employee perceptions of auto-enrollment into SRPs and the impact of varying default deferral rates on an employee's likelihood to stay in the plan. It also examines the attitudes and behaviors of public sector employees regarding retirement savings, their progress toward financial security, and issues driving their plan participation.
Download the report here.
"The findings are critically important given that the responsibility of saving for retirement in the public sector is shifting from the employer to the employee in many jurisdictions," said
Other report key findings are as follows:
- Nearly half (47 percent) of respondents approve of auto-enrollment in an SRP, and 44 percent approve of employers setting an employee's default rate. Strong approval of auto-enrollment declines from 24 percent to 12 percent when the default is set at seven percent rather than one percent.
- Respondents hold divided views on auto-escalation in supplemental plans, with slightly more disapproving (38 percent) than approving (30 percent). Approval and disapproval are affected by default rate, with lower approval among those presented with a higher default rate.
- Nearly four in five participants (79 percent) are satisfied with their retirement plan.
- Most owe some type of consumer debt (84 percent) and have savings goals in addition to retirement (85 percent). About two-thirds of these respondents (67 percent) say their debt or savings goals have prevented them from saving more for retirement.
- A slim majority want more information about general financial issues and retirement planning. About three in ten would welcome an increase in one-on-one in-person communication by employers and financial services companies.
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