More than half (54 per cent) of employees without a workplace retirement savings plan — including 77 per cent of millennials — say they’d participate in an employer-sponsored plan if it offered emergency savings features, according to a new survey by Natixis Investment Managers.
The survey, which polled more than 700 U.S. employees, also found nearly three-quarters (73 per cent) of all respondents — including millennials (88 per cent), generation X (72 per cent) and baby boomers (49 per cent) — said they’d be more likely to participate in their company’s defined contribution pension plan or increase their contributions if they were offered investments in companies with good environment, social and governance practices.
Nearly a third (31 per cent) of millennial respondents who currently participate in a workplace plan said they were automatically enrolled and 40 per cent said they still hold the default investments initially selected for them. Two-fifths (42 per cent) of respondents who said they aren’t contributing to a retirement savings plan now — including 63 per cent of millennials — intend to participate in their workplace plan when student loan repayment matching benefits take effect.
In addition, an employer’s matching contribution was the No. 1 reason respondents decided to participate in their workplace plan, with the exception of millennials, who cited the convenience of automatic paycheque withdrawal as the main reason they joined. Notably, 41 per cent of all respondents said access to professional investment advice was a top incentive for them to contribute more to their retirement plan, while two-thirds (67 per cent) said a bigger employer match was a top reason.
While respondents reported an average maximum employer match of 7.8 per cent, millennials were most likely (31 per cent) to work for a company that offers more than a 10 per cent match. As well, 54 per cent of millennials respondents and 43 per cent of all respondents said their employer increased the company’s match in the past 12 months.
Respondents across all generations cited inflation as the No. 1 barrier to saving more for retirement, at 44 per cent. However, millennials cited competing financial goals as their second top barrier. Moreover, 25 per cent of respondents who are DC plan participants — including 38 per cent of millennials — took an early withdrawal from their plan in the past 12 months. The top three reasons millennials tapped into their savings were to cover health-care costs (41 per cent), home repairs (36 per cent) and debt repayment (34 per cent).
Respondents also noted they’d like to see a range of investment options available in their plans, including retirement income-generating investments (90 per cent), alternatives (77 per cent) and sustainability-focused options (82 per cent). And half (52 per cent) said they want access to cryptocurrency in their retirement plan offering, including 78 per cent of millennials.