A new survey from MetLife released Thursday finds only oneâ€third of plan sponsors at FORTUNE 1000 companies describe their retirement benefits philosophy "as supporting employees’ efforts to create retirement income for the future.” The survey, Qualified Retirement Plan Barometer, also finds that while twoâ€thirds of plan sponsors say that retirement income is an important objective of their retirement plans, many are struggling to translate this sentiment into action.
The survey's "barometer score" is 59 out of a possible 100; the higher the value on the barometer, the stronger the overall culture of retirement income. While individual company scores range from a low of 19 to a high of 89, one segment – companies that offer broad access to defined-benefit (DB) and defined-contribution (DC) plans – outpace their peers with a barometer score of 74. These peers are those plan sponsors at companies that only offer a DC plan or incidental access to a DB plan, as well as a DC plan.
“Although most of the burden for retirement security has shifted to employees, plan sponsors still play a critical role,” Robin Lenna, executive vice president of corporate benefit funding with MetLife, said in a statement. “Plan sponsors have more work to do. Most plan sponsors continue to skew their goals, plan design, communications and decision support tools toward savings, which unfortunately favors accumulation over income.”
Key findings include:
- Almost half (47%) of plan sponsors report that they include all employees in automatic enrollment features, and 52% have implemented a default allocation to a target-date fund.
- Both stable value funds and target-date funds are widelyâ€offered investment options, with 87% and 76% of plan sponsors, respectively, including these vehicles in their investment line up for all employees.
- Many plans have eliminated or avoided adding an annuity distribution option in their DC plans for a number of reasons. Chief among them are fiduciary liability concerns and the administrative issues related to offering annuities. .
- While more than eight in 10 (84%) plan sponsors say that their company’s overall participation rate is extremely or very important in gauging the success of their retirement plans, just over half (52%) say the same about the ability to generate retirement income.