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
SSgA’s survey calls out an emerging group of younger investors categorized as “Generation DC.” This group reported an ongoing desire to learn more about retirement readiness despite the fact that they are more likely to be automatically enrolled into their DC retirement plan than their older peers; indicating that automation is not an indicator of inertia when it comes to saving for their future.
- 82 percent of employees 25 and under stated they are on track to save enough to meet their retirement goals, while the average of all employees surveyed was only 63 percent;
- 48 percent of employees 25 and under stated that they had increased their savings outside of the workplace in the last 12 months, while the average of all employees surveyed was only 37 percent; and
- 50 percent of employees 25 and under indicated a company-sponsored buddy program that encourages people to help other people save, while the average of all employees surveyed was 28 percent.
- Improving the enrollment experience for all employee demographics, not just for Generation DC;
- Offering transition guidance when employees change jobs, approach retirement and enter retirement;
- Getting to know Generation DC and their distinct attitudes and behaviors about retirement preparedness
- Understanding employees’ expectations regarding the role their employers play in helping them save for retirement; and
- Tailoring communication approaches by age and life stage.
About State Street Global AdvisorsState Street Global Advisors (SSgA) is a global leader in asset management. The firm is relied on by sophisticated investors worldwide for its disciplined investment process, powerful global investment platform and access to every major asset class, capitalization range and style. SSgA is the asset management business of State Street Corporation, one of the world’s leading providers of financial services to institutional investors. *The survey was conducted in collaboration with Boston Research Group, a leader in retirement plan research. The data were collected in October 2012 through a 12-minute Internet survey using a panel of verified 401(k), 403(b), profit sharing and stock purchase plan participants who were actively contributing to their plans. The sample of 1,153 net observations has a maximum sampling error of+/- 2.7 percentage points at a 95% confidence level. The results were weighted to equalize the results across age groups. CORP-0658