Improving DC plan members’ retirement readiness is a top priority for U.S. plan sponsors, according to a study.
The 12th Annual 401(k) Benchmarking Survey—conducted by Deloitte, the International Foundation of Employee Benefit Plans (IFEBP) and the International Society of Certified Employee Benefit Specialists (ISCEBS)—finds that 78% of plan sponsors identify retirement readiness as a key focus area.
Nearly nine out of 10 (88%) plan sponsors feel that enhancing their existing participant education and communication strategy is somewhat likely or very likely to positively impact their employees’ retirement readiness.
While respondents indicate the importance of being financially prepared for retirement, they also see that plan members require a fundamental understanding of financial, savings and investing concepts in order to define and act upon their retirement income needs.
“Plan sponsors clearly recognize the importance of saving for retirement and are working hard to provide their employees with the right tools to help them effectively plan for this next life stage,” says Stacy Sandler, a principal in Deloitte’s human capital practice.
The survey also finds that 401(k) balances are at an all-time high, with plan sponsors reporting average account balances of just above US$85,000.
“It is certainly a positive sign that 401(k) balances are increasing,” says Michael Wilson, chief executive of IFEBP and ISCEBS. “The vast majority of employees, however, are still far from having saved enough to afford a comfortable retirement.”