Employers Must Appeal To The Needs Of ‘Savers,’ Not ‘Investors’ To Boost Retirement Readiness, Finds State Street Global Advisors Survey

A new transatlantic defined contribution (DC) survey from State Street Global Advisors (SSgA), the investment management business of State Street Corporation (NYSE:STT), has found that retirement confidence remains alarmingly low among DC plan participants polled in the US, UK and Ireland.

SSgA’s most recent survey,* conducted with more than 2,000 plan participants, gives global insights into the unique needs of participants in different countries. It also gives single-country plans actionable information about country specific participant concerns. The findings indicate that just 31 percent of US participants, 26 percent of UK participants and 17 percent of Ireland participants feel confident that they will have enough saved through their employer sponsored DC plan to afford the lifestyle they want in retirement.

Nigel Aston, managing director and the head of UK DC at SSgA commented, “The latest DC survey highlights yet again that DC members principally view themselves as savers, not investors. Understanding this mindset is critical for providing the right kind of support to encourage increased contributions in workplace DC plans. We’re seeing consistently high levels of discomfort around market volatility, so it is more important than ever to ensure that pension plans offer investments that address this concern. Default strategies that balance risk and return can help increase the effectiveness of long-term saving efforts.”

The results also highlighted that investment knowledge remains critically low, with only 22 percent of respondents, on average, rating themselves as “very or extremely” knowledgeable about financial matters such as savings and investments. This lack of financial expertise may explain why investors were unwilling to take on additional risk to achieve greater returns, as only 27 percent of US participants, 15 percent of UK participants and 10 percent of Ireland participants would take “somewhat high risk or high risk” investments in order to achieve better returns.

“Many of our multinational clients are interested in aligning retirement plans across geographies,” said Fredrik Axsater, managing director and global head of DC at SSgA. “They are looking for research and ideas to help them build the best possible pension plans for their global employee network while operating within a unique regulatory environment specific to their region. SSgA is positioned to help plan sponsors find a consistent, practical approach to plan design and participant engagement.”

Across all regions at least one in five plan participants seek help or advice on their employer-sponsored retirement plans from websites, advisors, online tools or their employer. The bulk of respondents across the US, UK and Ireland find retirement planning information from websites, advisors and financial publications most useful, ahead of guidance from the government and their employer.

The research into DC plan participants’ attitudes toward retirement, retirement planning habits and current level of savings was conducted in February and March 2014. Respondents were aged 22 to 65, working at least part-time, and participating in their employer-sponsored DC plan.

For more details on the SSgA transatlantic DC survey, please click here

About State Street Global Advisors

State 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.

Important Information

Investing involves risk including the risk of loss of principal.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSgA's express written consent.

The information provided does not constitute investment advice as such term is defined under the Markets in Financial Instruments Directive (2004/39/EC) and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any investment. It does not take into account any investor's or potential investor’s particular investment objectives, strategies, tax status, risk appetite or investment horizon. If you require investment advice you should consult your tax and financial or other professional advisor.

All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

This document is presented in draft format and is subject to change based on many factors. Once information is agreed upon and finalized you will be provided a copy for your use. There is no representation or warranty as to the accuracy of the information and SSgA shall have no liability for decisions based on such information.

United States: State Street Global Advisors, One Lincoln Street, Boston, MA 02111-2900

Ireland: State Street Global Advisors Ireland Limited is regulated by the Central Bank of Ireland. Incorporated and registered in Ireland at Two Park Place, Upper Hatch Street, Dublin 2. Registered number 145221. Member of the Irish Association of Investment Managers.

United Kingdom: State Street Global Advisors Limited. Authorised and regulated by the Financial Conduct Authority. Registered in England. Registered No. 2509928. VAT No. 5776591 81. Registered office: 20 Churchill Place, Canary Wharf, London, E14 5HJ. Telephone: 020 3395 6000. Facsimile: 020 3395 6350.

Web: www.ssga.com

DCUK-0046Expiration date 31 th July 2015

*The SSgA DC Transatlantic Survey was conducted in February and March 2014. Survey respondents included 1012 participants in the United States, 1000 in the United Kingdom and 150 in Ireland.

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