Employees want their employers to get active about upping employee participation in defined contribution retirement plans. Employers? Not so much.
According to a new study from Northern Trust, 88 percent of employees say they strongly favor employers providing them with tools so they can figure out whether they're putting away enough money for retirement.
Not only that, 80 percent say employers should be actively encouraging employees to save, and 84 percent are in favor of employers providing them with incentives to save. And 72 percent say employers should be offering a viewpoint on contribution amounts.
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Sponsors, however, aren't ready to take the plunge, and are not all that willing to commit to providing suggestions on either specific amounts to save or how much employees might need in retirement.
Study results suggest employers ought to prepare themselves to respond to employees' preferences, even though they might have to clarify their roles as fiduciaries in order to feel comfortable doing so.
Northern Trust has suggested, based on survey results, that employers should become more active in encouraging saving for retirement. In particular, they should consider offering specific targets based on employees' ages and salary levels, in addition to encouraging them to plan for retirement.
Providing employees with projections on how much they should be saving or how much they might received monthly or annually when retired is something employees want. That's not surprising, considering that 60 percent feel they're not saving at a rate that will allow them to retire. Sponsors seem to be OK with the idea, but they're not sure how accurate those projections might be.
Something else employers might consider is providing an investment option that offers a regular stream of income that's predictable, so that employees can save and plan accordingly. Participants have said they're interested in such options, and sponsors have recognized that offering them might cut down on the number of rollovers that might cost participants more and have less fiduciary oversight.
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