Employees overwhelmingly favour their employers playing a more active role in their DC retirement plans.
But plan sponsors voice reluctance to doing so.
A Northern Trust survey of U.S. workers finds: 88% strongly or somewhat favour their employers providing tools to help determine if they are saving the correct amount for a financially secure retirement; 80% believe employers should encourage employees to contribute to their retirement plan, and 84% support employers providing incentives to encourage contributions; and 72% think employers should provide a viewpoint on contribution amounts.
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In addition, more than four in five employees say they would consider taking their employer’s advice when determining their contribution to retirement plan.
For their part, plan sponsors interviewed for the study have reservations about taking a more active role in encouraging specific levels of saving and providing projections of retirement savings or income for participants.
“Plan sponsors generally agree it’s important to encourage saving for retirement,” says Jim Danaher, managing director of defined contribution solutions at Northern Trust. “They have real concerns, however, about providing participants with targeted recommendations—by salary level or age—about how much they should be saving.”
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