While only 6 percent of those surveyed say their companies have already transferred their defined benefit plan risk to a third-party insurer, approximately 40 percent say they will consider doing so within the next two years.McDonald said as defined benefit plans become less commonplace, defined contribution plans need to be enhanced to ensure employees have enough money to sustain a comfortable retirement. “Most executives think a significant portion of their employees will have to work longer because they don’t have enough money to retire. Adding guaranteed income options to defined contribution plans can go a long way to ease employees’ fear about the volatile investment environment,” she added. The survey found that more than 60 percent of executives believe employees enrolled in defined contribution plans will make better investment decisions if they are invested in an option that includes a guaranteed income feature. Many of the executives say their companies are at least somewhat likely to offer guaranteed lifetime income products over the next two years. Other survey findings included:
- Nearly three-quarters agree the use of voluntary benefits is a cost-effective way to increase employee satisfaction with benefits. This finding represents a substantial increase over 2012, when 56 percent of the respondents agreed. Voluntary benefits include offerings such as life, disability, critical illness, and accident insurance.
- More than a quarter say their companies have already shifted a large portion of the costs for healthcare coverage to employees, and another 34 percent say their companies are very likely to do so within the next two years.
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