Workers Mostly Satisfied with Retirement Benefits

May 6, 2014 ( – More workers are satisfied with their retirement benefits now compared with five years ago, but satisfaction with other benefits has declined, according to professional services firm Towers Watson.

By John Manganaro | May 06, 2014
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The latest release of the annual Towers Watson Global Benefits Attitudes Survey finds that nearly seven in 10 U.S. employees say they are satisfied with their employer-sponsored retirement plans, including both defined benefit (DB) and defined contribution (DC) arrangements. That’s a jump of 13% since 2009, with much of the increase concentrated among younger employees and those with access to DB plans.

“The economic uncertainty and corporate cutbacks over the past few years have given employees a reason to evaluate their finances and retirement plans,” explains Kevin Wagner, a senior consultant at Towers Watson. “While more workers are happy with their retirement benefits, they are increasingly concerned that their retirement income will come up short when they exit the work force.”

Most employees view their employer plan as their primary retirement savings vehicle, Wagner says, perhaps explaining why they are willing to give up a portion of their paycheck for more generous and secure retirement benefits. The survey results show 62% of employees would give up some pay for a guaranteed retirement benefit, a sharp increase from 46% in 2009. Additionally, nearly six in 10 (58%) would sacrifice pay for more generous retirement benefits.

In another positive sign, more than half of U.S. workers (56%) say that retirement security has become more important to them over the last few years. The importance of income security was more pronounced for older workers, with nearly eight in 10 (78%) workers age 50 or older citing such concerns. Slightly less than four in 10 (39%) employees under age 40 are concerned about sustainable retirement income.

Interestingly, the survey found that DB plan participants worry more about retirement security than participants with only a DC plan, perhaps reflecting fears of further cutbacks in DB plans.

“Given employees’ widespread concern about retirement security and readiness, this may be the ideal time for employers to reevaluate their employee benefits and strategies for the future,” says David Speier, a senior consultant at Towers Watson. “Addressing employees’ preferences for retirement and health care benefits could help employers provide a more engaging work environment, and at the same time help workers in their efforts to prepare for a comfortable and financially secure retirement.”