The percentage of America’s young workers who say that a retirement program is an important factor in joining or staying with an employer jumped sharply in the past two years, according to a survey by consultancy Towers Watson. This was especially true when the employer offered a defined benefit pension plan.
The firm's Retirement Attitudes Survey, conducted in June and July 2011, includes responses from 9,218 full-time U.S. employees at nongovernment organizations with 1,000 or more employees. The survey found that:
• Among workers younger than age 40 whose employer offers a defined benefit (DB) pension plan, the percentage who agreed the retirement benefits were an important factor in accepting their job more than doubled—from 28 percent in 2009 to 63 percent in 2011.
• For workers younger than age 40 at organizations that offer only a 401(k)-type defined contribution (DC) plan, the percentage who agreed the retirement program was an important factor in accepting their job grew more modestly, from 19 percent in 2009 to 28 percent in 2011.
• Nearly three-fourths (72 percent) of young employees whose employer offers a DB plan cited the retirement plan as a strong incentive to stay with their employer—nearly double the percentage (37 percent) in 2009 and twice the retention value reported by young workers whose employers offer only a DC plan.
• More than three-fourths (77 percent) of new hires at companies with a DB plan said the retirement plan gave them an important reason to stay on the job, and 85 percent hoped to work for their employer until retirement.
“In good and bad economic times, building and keeping a talented workforce can often mean the difference between success and failure. Employers with open DB plans appear to have a leg up on their competitors in keeping employees,” said Laurie Bienstock, North America practice leader for rewards at Towers Watson. “Understanding worker preferences toward their reward programs is critical for employers that are looking to attract and retain the critical skill employees needed to drive business success.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Workers Would Trade Pay for Greater Retirement Security, SHRM Online Benefits Discipline, March 2012
Employers Enhance Their Retirement Plans in 2012, SHRM Online Benefits Discipline, January 2012
Young Workers Concerned About Keeping Defined Benefit Plans, SHRM Online Benefits Discipline, September 2010
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