Employers are offering creative perks to attract and retain today’s workers.
Plus all the HR resources you need to be more efficient and effective this fall!
SHRM Seminars will host HR education every month in San Francisco this fall! Select the program that meets both your scheduling and development needs.
September 27 - 28.
U.S. companies have little confidence that workers are taking the actions necessary to meet their retirement savings needs, according to a survey by consultancy Aon Hewitt.
The survey of 210 mid-to-large U.S. companies representing 6.2 million workersreveals that:
As a result, companies are increasingly focusing on adding features and making plan design changes to boost savings rates and promote responsible investing.
In an effort to increase participation in savings plans, more companies are automatically enrolling workers into plans:
These features continue to become more prevalent. More than a quarter of employers (26 percent) are likely to add automatic escalation in 2011, and a third are considering adding automatic rebalancing.
"Only half of Generation Y workers who are eligible to participate in a defined contribution plan actually do so, leading to a significant gap in retirement savings," said Pamela Hess, director of retirement research at Aon Hewitt. "Auto-enrollment is a relatively simple and effective way for companies to help workers plan for retirement—especially younger workers who may not feel the immediate pressure to save for retirement."
Countering 'Suboptimal' Behavior
Once workers are enrolled in 401(k) plans, their investing habits are often suboptimal, Aon Hewitt research shows. Many employees are not investing in a diversified portfolio and are taking inappropriate risk, and very few rebalance their portfolio regularly, if at all.
As a result, more companies are offering tools and services to help participants make better decisions. To simplify investment decision-making:
As companies make changes to their defined contribution plans for 2011, many are adding solutions. Nearly half (47 percent) are likely to add online general guidance, over a third (36 percent) are likely to offer online advice, and 30 percent are considering offering managed accounts.
"Amid the recent market volatility there has been a dramatic difference in outcomes among people who sought out investment assistance vs. those who have not," Hess explained. "Employers are seeing the disparity and realize they need to step up their efforts to ensure workers are saving adequately for retirement and have an investment strategy."
At the same time, she noted, "Companies acknowledge the diverse needs of the workforce and understand that they need to offer a variety of investment advisory tools to meet the various needs and savings habits of their employees."
Stephen Miller is an online editor/manager for SHRM.
Employees' Retirement Readiness Is Employer Priority, SHRM Online Benefits Discipline, January 2011
Income-Replacement Goals Overlooked by Plan Sponsors, SHRM Online Benefits Discipline, January 2011
• Sign up for SHRM’s free
Compensation & Benefits e-newsletter
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
CA Resources at Your Fingertips
SHRM’s HR Vendor Directory contains over 3,200 companies