A new study finds retirement benefits keep affluent employees committed to an employer, more so than health care benefits.
According to the latest Merrill Lynch Affluent Insights Quarterly, a survey of the values, financial priorities and concerns of affluent Americans, 60 percent of employees cite retirement benefits are a big factor other than compensation and promotions that keep them loyal to a company.
Health care benefits fall close behind in importance at 58 percent, and simply enjoying what they do also comes in at 58 percent.
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"In today's world of high unemployment, it's easy to forget that America's long-term challenge will more likely be too few workers, not too few jobs," said Andy Sieg, head of Retirement and Philanthropic Services for Bank of America Merrill Lynch. "As baby boomers begin to exit the workforce, employers will face an intensifying war for talent for which a new wave of innovation and creativity in the delivery of retirement and other benefits will be among the keys to winning. We already see some of the most dynamic employers enhancing their benefit offerings to further their competitive edge when attracting and retaining talent."
For the majority of affluent employees, workplace retirement vehicles, such as 401(k) and 403(b) plans, are among the primary tools in which they save and invest for their future. According to the survey, more than half (54 percent) rely solely or heavily on retirement plans offered by their employers to meet retirement goals. However, among them, 60 percent do not contribute the maximum allotted amount to these accounts, inviting greater potential for retirement funding shortfalls and a need to retire later than they may have hoped. In fact, 45 percent of affluent individuals expect to retire later than they had originally planned, compared to just 29 percent in January 2010.
Affluent employees believe more could be done by their employer, including access to a financial professional who can offer personalized advice and guidance (26 percent), better financial education programs about how to save for retirement (24 percent), and education and advice about issues beyond retirement savings, such as budgeting, college savings plans and debt management (21 percent).
Among affluent employees with access to financial education or advice services offered by their employer -particularly pertaining to their 401(k) or other workplace retirement plans – 77 percent take advantage of such value-added benefits.
"As the role employers play in helping employees reach their retirement goals continues to evolve, many are focused on ways to make it easier for employees to utilize their benefits plans in a more comprehensive and effective manner," said Kevin Crain, head of Institutional Client Relationships for Bank of America Merrill Lynch. "In addition to the growing use of automatic enrollment and automatic increase features within 401(k) plans, companies are increasingly offering employees greater access to meaningful financial tools with advice and guidance, across multiple channels and from the earliest stages of their careers through their transition into retirement. We see the most successful retirement plans being those easiest for employees to understand and engage in transactions."
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