Many employers are skeptical about whether workers want more retirement planning information, and many are afraid to offer plan participants investment advice.
Researchers at Transamerica Retirement Services, Los Angeles, have published figures supporting those conclusions in a summary of results from a 2006 survey of 659 business owners and other benefits decisionmakers and a related survey of 1,402 U.S. workers ages 18 and older who work for private, for-profit employers with 10 or more employees.
President Bush recently signed the Pension Protection Act of 2006, which is supposed to encourage employers to offer retirement plan members investment advice.
At companies with retirement plan members, about 51% of the benefits managers said their companies already offer participants investment advice, and 47% of the benefits managers said their companies do not offer advice, Transamerica researchers report.
Only 8% of the plan sponsors without advice programs now plan to add advice programs, and 56% of sponsors resisting advice programs cite “potential liability” as a concern.
Potential liability was the most commonly cited concern, and no other concern was mentioned by more than 9% of the benefits managers surveyed.
About 84% of the benefits managers said offering a retirement plan package is “very important” or “somewhat important” for employers trying to attract and retain employees, but 82% of the benefits managers said employees are not saving enough for retirement, and 88% said employees “don’t know as much as they should” about saving for retirement, Transamerica researchers report.
Although 45% of the benefits managers agreed with the statement that “employees want more information” about retirement, 52% said they “somewhat disagree” or “strongly disagree” with that proposition.
Meanwhile, employees surveyed ranked self-funded retirement plans as ranking second in importance as a benefit only to health insurance, with 90% of employees giving a “very important” rating to health insurance, 71% to retirement benefits, and 50% to disability insurance.
But some employees admitted to being lazy about participating in their employers’ retirement plans: about 15% of the employees not enrolled in their employers’ plans said they “have been intending to sign up – just haven’t taken the time to do so yet.”
“Financially stretched” ranked as the top reason for not participating, at 27%, and “just started with company – not eligible to join” ranked second, at 18%.