When it comes to saving more for retirement, most employees are eager for more support and they want their employer to automatically increase their savings rate, according to the most recent survey of US workplace retirement plan participants released today by State Street Global Advisors (SSgA), the asset management business of State Street Corporation (NYSE: STT).
SSgA’s DC Investor Survey, conducted jointly with Boston Research Group, surveyed over 1,000* employees who participate in 401(k), 403(b), 457 and profit sharing plans. It focused on the times when employees make some of their most important decisions about their retirement, which the study’s authors labeled “Entrances, Exits and In-Between.”
The study confirmed previous SSgA findings about the need for employers to provide expert guidance and play an active role in helping make saving for retirement easier:
- 74 percent of employees surveyed want clear examples that will show them how their savings will pay off in the future
- 71 percent want employers to increase their savings rate by one percent automatically each year; and
- 62 percent of employees 25 and younger said they want their employers to show them how to spend less so they can save more, compared to 53 percent of all employees surveyed
“Our study leaves no doubt that employees want help in saving more and they want it to be as easy as possible,” said Fredrik Axsater, managing director and head of global Defined Contribution for SSgA. “Many of our plan sponsor clients have expressed some hesitancy about automatically increasing savings rates for their employees. We hope this survey will help convince employers to prioritize savings adequacy in 2013.”
Survey respondents indicated that they want advice and guidance from experts when making decisions about their investments and their overall retirement readiness at critical inflection points like enrollment, job transition and exiting their plan at retirement. Axsater highlighted the importance of providing employees with simple, straight-forward tools that will help them determine how much to save and how to invest wisely. “This is a perfect opportunity for employers to provide worksheets, calculators and other interactive tools to help their employees make good choices and understand the long-term trade-offs in achieving their retirement goals.” Axsater continued, “For example, employers can assist employees when they are enrolling in their plan by highlighting the benefits of target date funds and access to online interactive planning tools. In addition, employers can support better decisions made at the time of exit by providing employees with a clear illustration of their options, including the pros and cons.”