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Benefits March 12, 2007
401(k) Participants Lean toward Salary Bump over Higher Match
March 12, 2007 (PLANSPONSOR.com) - Workers
participating in a 401(k) plan were more likely to prefer a
salary increase rather than a higher employer match,
according to a new survey.
Reported by Fred Schneyer
A Principal Financial Group news release about its latest Principal Financial Well-Being Index said 58% opted for the wage bump while 42% said they would rather their employer increase the firm’s savings plan contribution.
When it comes to workplace bonuses, the survey found many workers taking a somewhat fiscally disciplined approach to the cash infusion. As for where the added dollars went, respondents reported:
- more than a third (36%) said that they paid down or paid off short-term debts,
- more than one fourth (28%) said they used their bonus to purchase gifts during the holiday season; and
- 27% said they saved or invested the bonus.
About three in 10 workers (31%) said they received a corporate bonus, compared to one in four (25%) in first quarter 2006.
When it comes to a tax refund, nearly half of workers (44%), but only 15% of retirees, say they will pay down or pay off short-term debts. A significant portion of both workers (43%) and retirees (41%) plan to save or invest the refund.
Against the backdrop of a strong economy, 65% of workers have already or expect to receive a raise from their employer in 2007 with 44% anticipating receiving a 3% to 4% increase, according to the survey.
Principal commissioned Harris Interactive to conduct online research with employees (ages 18+) of small and mid-sized U.S. businesses (firm size 10 – 1,000 employees) about their attitudes regarding their financial well being and their employee benefits. To compare responses, Harris Interactive also interviewed a group of retirees. Harris Interactive conducted the survey online among 1,181 employees and 536 retirees from January 24 -February 5, 2007.