This is really a call to action to the industry. Even though the burden of funding retirement has decidedly shifted to participants, employers and plan providers can play a critical role in helping them to that end.
Harrison, NY (PRWEB) May 05, 2011
When people set a goal for their retirement savings, they tend to be more engaged in actively planning for their retirement. This includes increasing the amount they actually save and staying on top of news associated with their specific retirement plans. The survey of more than 2,400 plan participants, conducted by Diversified’s Retirement Research Council, showed that employees have become more active in their retirement planning within the last year.
Specifically, 29% of respondents established a retirement income goal in the past year, an eight percentage point increase from 2010. Forty-one percent increased the amount they are saving for retirement, a three percentage point increase over last year. In addition, 62% of those surveyed said they monitored their retirement outlook to assess where they stand vis-à-vis their retirement income goals and for insight into how they can adjust their asset allocation or contribution level to improve their outlook.
The survey also underscored the benefit of educating participants about goal setting, with 71% of respondents who are not confident they will have enough for retirement saying they were likely to contribute more to their retirement savings accounts if they were educated on how much they actually needed to retire. Participants overall indicated they want this kind of assistance as well - 57% expressed interest in getting help with setting goals and 50% would welcome assistance with monitoring goal progress.
“These results are a very positive indication that people have become much more attuned to the responsibility they have in meeting their retirement needs and that participant communications and education can have a meaningful impact on helping them reach a funded retirement,” noted Patricia Advaney, senior vice president of Participant Solutions for Diversified. “This is really a call to action to the industry. Even though the burden of funding retirement has decidedly shifted to participants, employers and plan providers can play a critical role in helping them to that end.”
Among the survey’s other findings:
- Participants are saving more for retirement—66% of participants are saving 6% or more, a six percentage point increase over the number of respondents doing so a year ago.
- While most participants have a retirement goal, they are not very confident they will have enough for retirement and 35% were simply guessing about the amount they needed.
- Less than one-in-three participants are confident about the amount of income they will have in retirement: only 7% said they are extremely confident and 21% said they are very confident. Those without a goal are even less confident, with only 2% saying they are extremely confident and 6% very confident.
- The good news is that participants are increasingly interested in seeking help to establish a retirement income goal: there was an eight percentage point increase in the number of participants who want help in creating goals over last year (now 57%). Fifty-two percent want help understanding their investment options (a 12 percentage point increase from last year’s survey) and 50% want help measuring progress toward their goals (a 10 percentage point increase over last year).
Diversified is a leading provider of customized retirement plan administration, participant communication and open architecture investment solutions for mid- to large-sized organizations. The company’s expertise covers the entire spectrum of defined benefit and defined contribution plans, including: 401(k) and 403(b) (Traditional and Roth); 457; nonqualified deferred compensation; profit sharing; money purchase; cash balance and Taft-Hartley plans; and rollover and Roth IRA. Diversified helps two million participants save and invest wisely for and throughout retirement.
Headquartered in Harrison, NY, the company’s regional offices are located in Arkansas, California, Florida, Illinois, Iowa, Louisiana, Maryland, Massachusetts, New York, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Utah and Wisconsin. To learn more, visit http://www.divinvest.com.
About Diversified’s Retirement Research Council™
The Retirement Research Council, the research group of Diversified, is dedicated to:
- Portraying a comprehensive picture of the institutional retirement plans market;
- Detailing trends to assist with the strategic evaluation of retirement plans; and
- Providing retirement plan sponsors and their advisors with comprehensive benchmarking information.
Drawing on more than 50 years of experience in retirement plan management, the Council periodically assembles a panel of experts from all facets of the retirement plans market to evaluate the current and future impact of trends shaping our industry.
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