Employee Interest in Retirement Income Runs Deep

Workers are more concerned about — and more interested in doing something about — their retirement income than they are about financing their health care, a new Towers Watson study reveals. In fact, not only are they more concerned about setting something aside for their retirement, a majority said they are even willing to trade other benefits — including a generous health care plan — for guaranteed retirement income later. 

Employee interest in retirement security runs deep and cuts across demographic lines. Workers in every age category in the study say it has become a more important issue for them in the last two to three years. It is a greater concern for DB plan participants than for DC plan participants (63 percent vs. 55 percent). Not surprisingly, participants in frozen DB plans are the most concerned of all, to the tune of 75 percent. 

Naturally, employer-provided retirement plans figure heavily in how employees expect to provide for their retirement — 74 percent said such plans are their primary way of saving for retirement. And the upheaval of the Great Recession and lackluster recovery in its aftermath did not shake that expectation; in fact, the opposite has been the case. In 2009, 61 percent had such an expectation. 

Employees’ satisfaction with their retirement plans rose from 54 percent to 67 percent between 2009 and 2013 — increasing in every age group. Towers Watson includes the caveat, however, that satisfaction may be a relatively soft measure, since it tends to reflect employee expectations of a plan, which it says could be a low bar. It found that employees’ assessment of the plans’ effectiveness was much lower than their satisfaction with them. 

Willingness to devote a higher amount of pay for more generous retirement benefits stands at 58 percent. More striking is that that willingness regarding a program that guarantees retirement benefits is at 62percent, a 16 percentage-point jump since 2009. 

John Iekel is Senior Writer and Editor for the ASPPA Net and NTSA Net portals.