Most sponsors of 401(k) plans report that they are dissatisfied with their workers’ current retirement savings rates, and plan to use a number of initiatives to increase savings rates and improve their employees’ financial wellbeing, the results of a recent survey conducted by human resources consultancy Aon Hewitt indicated.employer employee
The survey asked more than 250 U.S. employers (representing nearly nine million workers) about their retirement benefit priorities, and about the changes they are likely to make to their retirement plans. The results, which were released on January 15, 2017 showed that just 15% of the retirement plan sponsors surveyed are satisfied with their workers’ current retirement savings rates, and that nearly all of the employers (90%) surveyed are concerned about their workers’ level of understanding about how much they need to save to achieve adequate retirement savings. The findings also indicated, however, that nearly all of the employers (87%) who said they are not satisfied with their employees’ savings rates are likely to take action this year to help workers make plans to reach their retirement goals.
The results further suggested that employers are increasingly taking an interest in the issue of financial wellbeing: 60% of respondents said they believe that this issue has grown in importance over the past two years. The survey also showed that 92% of respondents intend to focus on the financial wellbeing of workers in ways that extend beyond planning for retirement, such as helping workers better manage their student loan debts, their day-to-day budgeting, and even their physical and emotional wellbeing. Moreover, the results indicated that 58% of respondents currently have a tool available that covers at least one aspect of financial wellbeing, and that 84% expect to offer such a tool by the end of the year.
Researchers also observed that employers are taking the lessons learned from automatic enrollment and enhancing their automatic features to boost savings rates, citing a separate 2015 report that showed that more than half of all plans with automatic enrollment default workers at or above the company match threshold. The report further indicated that employers are adding contribution escalation features and enrolling—or “backsweeping”—workers who were not previously enrolled in the 401(k) plan.