A quarter of employees recently surveyed by Towers Watson say retirement programs – particularly defined benefit plans – are keeping them committed to their job, and almost three-fourths of new employees say retirement plans are important motivators to stay.
The survey of more than 3,000 employees, conducted in May and June of 2010, found that 60 percent of new employees (those with less than two years of service) at employers with DB plans cited the retirement program as an important reason they chose to work for their current employer, a sharp increase from just 27 percent in 2009.
And nearly three-fourths (72 percent) of new employees said the retirement program is an important reason they will stay with their employer, up from 51 percent in 2009.
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Conversely, just 20 percent of new employees with only a defined contribution (DC) plan in the retirement program said it played a role in their decision to work for their employer, up from 16 percent in 2009. Meanwhile, one-fourth (26 percent) said the retirement program was an important reason to remain with their current employer, unchanged from 2009.
"Given the growing importance of security in retirement, employees increasingly view retirement benefits as a significant differentiator when making decisions about where to work," said David Speier, a senior retirement consultant at Towers Watson. "In an environment in which talented employees are difficult to lure away from stable jobs, retirement plans — and especially defined benefit plans — could give employers the edge they need."
The survey also found that two-thirds of employees (67 percent) would like to continue working for their current employer until they retire, an increase from 56 percent in 2009. However, DB plans are much more likely than DC plans to be an important factor in the retention of employees. Four of five workers (80 percent) at organizations with DB plans said they plan to continue working for their employer until they retire, compared with only 62 percent at companies with DC plans.
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