Responsible investment options could improve participation, contribution rates

American workers believe their retirement plans should offer responsible investment options and having these options would favourably affect their attitudes toward the plan and their employers, a Calvert Investments survey finds.

Eighty-seven percent of retirement plan participants want investment options that align with their values. This interest was led by women and millennials. The vast majority (82%) say they would select a responsible investment option if one was offered by the plan.

Read: Employers improving DC plan participation rates

Eligible non-participants (56%) are more likely to participate in the plan if it offers a responsible investment option. Overall, plan participants express strong concern over social causes, the environment, and “giving back” in some form.

“These findings send a clear signal to employers that employees not only want them to offer a responsible investing option, but that by doing so, they will have more engaged participants,” says Lynne Ford, executive vice-president of distribution at Calvert Investments.

In terms of their own plans, employers need to inform plan participants where responsible investment options are offered. While 28% of plan participants say they believe their plans offer a responsible investment option, a full 50% are unsure.

What is clear, however, is that those who believe their plan offers responsible investing options are more satisfied with both their plan and employer. While only 50% of the participants surveyed say they were “highly satisfied” with their retirement plan, those who believed their plans included responsible investing options were significantly more likely to be in this category.

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