Despite the economic downturn and a widely held belief that the country is heading into another recession, benefit plan participants are committed to saving money for retirement, according to the Mercer Workplace Survey.

Typically, there is a direct correlation between economic outlook and retirement behavior, the report said, but this year, despite deep economic concerns, participants seem to be renewing their focus on retirement savings and gaining confidence in their ability to do so.

"In 2010, most participants saw the economy improving but not their own personal situation – a highly unusual divergence," said Suzanne Nolan, partner and director of marketing and communications for Mercer's U.S. Outsourcing business. "This year's results reflect a stunning reversal in terms of a highly negative view of the economy but a renewed commitment to and accountability for their own retirement planning."

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During the past year, 41 percent of participants claimed to have increased their 401(k) contribution rate (up from 31 percent in 2010), 40 percent reallocated existing portfolios (up from 33 percent) and 38 percent reallocated their future contributions (up from 29 percent). In the coming year, participants also plan to contribute more to their 401(k) plans, and a slightly higher percentage expect to contribute the tax-deferred maximum.

The study found that plan participants are becoming more accountable for their retirement decisions. A resounding 85 percent of participants feel confident in their 401(k) asset allocation, 83 percent in their investment selection and 77 percent in their contribution amount. These results are all improvements over 2010 results and, in fact, top some levels found in pre-recession responses.

"We believe this increase in personal accountability among retirement plan participants is 'good news' for plan sponsors and their on-going efforts to increase employee engagement levels," says Nolan. "Participants seem to be saying that they can no longer rely on market performance, their employer or the government to build their retirement savings for them, but must take control of every aspect they can in order to provide for a successful retirement. Employers and plan sponsors alike should see this as a unique opportunity to offer and promote tools and resources to assist participants in making informed retirement decisions."

The Mercer Workplace Survey tracks employee attitudes toward, and experiences with, employer-sponsored retirement, health and benefits programs. Mercer is a global leader in human resource consulting, outsourcing and investment services.

 

 

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