June 11, 2012 (PLANSPONSOR.com) - Employees are willing to give up a percent of their salary in exchange for retirement income, a survey found.
When asked about the desire for a guaranteed source of income during retirement, 82% of employees would be willing to give up 5% of their salary if it meant having reliable income to help them live comfortably during their later years, according to Bank of America Merrill Lynch’s 2012 Workplace Benefits Report. Forty-two percent said they would be willing to give up 10% or more of their salary.
Kevin Crain, head of institutional retirement and benefit services for Bank of America Merrill Lynch, told PLANSPONSOR he found these survey results “very surprising, but in a very good way.”
“I think if the employees are pushing for [retirement income], you will see a push on employers,” he said. “Plan sponsors are really going to jump to the cause. Employees are getting very aggressive in their attitudes about this.”
Survey results indicate that employees are also focusing on health care expenses in retirement. More than half (57%) of employees view HSAs as important to their financial security. Health Savings Account (HSA) use by employers and employees is growing rapidly. Bank of America Merrill Lynch’s survey found that 30% of companies now offer an HSA option to their employees, among whom 35% participate in this tax-advantaged savings vehicle.
“Our research finds that most employees are realistic in their view that health care costs—throughout what for many will be a longer life than previous generations—will be one of their most significant expenses later in life,” said Bob Kaiser, head of health savings for Bank of America Merrill Lynch. Crain added he thinks the trend of interest in how people can save for health care will be a “very strong positive continuum.”