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February 01, 2016 at 10:39 AM
New research from State Street Global Advisors examines a group it’s calling “Generation DC.”
“This watershed population of employees is the first to travel the retirement journey with minimal access to traditional pension plans and is instead testing what it means to self-fund and self-manage their retirement through an employer-sponsored DC plan,” the report states.
The research, which examines employees who participate in workplace defined contribution plans, surveyed 1,500 U.S. workers, ages 22 to 50, who were employed on at least a part-time basis and offered a DC plan by their employer.
SSGA picked this group specifically because it’s the first cohort to rely predominantly on a defined contribution plan as their primary source of retirement funding.
What the research finds is that, across the board, members of Generation DC understand the importance of saving for retirement, value their DC plans and welcome assistance from their employers.
According to the survey, 87% of the participants agree it’s important to start saving for retirement early and 83% agree that saving is a priority.
A vast majority (80%) also say they like their jobs and value their employee benefits.
Sixty-nine percent say it’s OK if the employer increases their savings rate 1% each year.
SSGA believes these findings are positive signs that all of Generation DC is ready to engage with plan sponsors about their retirement savings.
Participants in the survey were asked “Who do you trust?“
“Doctors came out as number one most trustworthy,” Suzanne Duncan, senior vice president and global head of research at State Street Center for Applied Research, said at a media briefing on Wednesday. “Interestingly enough, number two is employers. They do trust employees.”
Fredrik Axsater, senior managing director and head of global defined contribution at State Street Global Advisors, said this shows participants have a “great level of trust in plan sponsors.”
