NU Online News Service, Nov. 18, 1:23 p.m. – Employees of small businesses still like the concept of employee-funded retirement plans such as 401(k) plans, in spite of the recent stock market slump, according to the results of a survey by Harris Interactive Inc., Rochester, N.Y.
Harris researchers surveyed 300 small-business executives and 765 small-business employees over the age of 18 in October for Transamerica Retirement Services, Los Angeles, a unit of AEGON N.V. The Hague, Netherlands.
Transamerica defined a small business as a company with 10 to 500 employees.
Sixty-one percent of the employees polled said they would prefer to rely on an outside expert to manage their investments, up from 45% in 2001, the researchers report.
But, despite the slump, 73% of the employees surveyed said they preferred 401(k) plans to traditional, company-directed pension plans.
Ninety-two percent of the employees said they had either maintained or increased their retirement savings plan contributions in the past 12 months.
Only 20% of the employees had changed plan asset allocations. Of those, 66% had moved dollars into lower-risk funds, but 66% had moved dollars into higher-risk funds or similar-risk funds.
Meanwhile, the Harris researchers found that employers’ interest in retirement savings plans was also relatively stable.
Although 30% had cut jobs and 20% had frozen salaries, only 5% said they had tried to trim expenses by reducing or eliminating retirement benefits.