Recession and Uncertainty of Entitlements Places Increased Importance on Financial Benefits, Ignites Positive Savings Actions Among Employees of All AgesSince the recession began, nearly half (47 percent) of employers have seen an increase in the frequency that prospective employees inquire about the financial benefit plans offered by their company. Employers have also observed a number of behavioral shifts in terms of how current employees are engaging with their retirement benefit plans. When compared to prior to the downturn:
- 58 percent of employers find that employees approaching retirement are taking a more active, hands-on approach to their financial benefit plans.
- 36 percent find that younger employees are enrolling earlier into financial benefit plans.
- 26 percent find that employees are contributing enough to receive their full company match at an earlier age.
- 19 percent find that employees are maxing out contributions at an earlier age.
Given the uncertainty about the future of Social Security, and with employers moving away from traditional pension plans, employees may become increasingly reliant on defined contribution plans, such as a 401(k) plan, when saving and investing for the future. Assuming this trend continues, most employers (75 percent) anticipate that a greater number of employees will enroll in 401(k) plans or increase their contribution rates. Employers also anticipate increased demand for access to 401(k) saving and investment advice (79 percent), and that older employees will work longer to extend the benefits of these plans (84 percent).
Employees will become increasingly aware of the company sponsored benefit programs, what they do and do not offer. A well designed retirement plan will attract and retain talented employees.
Please comment or call to discuss how a properly designed retirement plan could help your company and it’s bottom line.
- 6 Features of a Good 401(k) Plan (money.usnews.com)
- Four-in-five not ready for retirement (401kplanadvisors.com)