The survey, conducted in late March by Harris Interactive on behalf of The Principal Group, shows 86% of small and mid-sized company employees with retirement savings said they will not move their investments from volatile to more stable investments as a result of the fluctuating market.
The Principal added that most of its 2.8 million plan members have left their investment allocations untouched, with around 70% of allocations remaining in equities.
Despite their steady investment behavior, however, the slowing economy is raising employee concern, as evidenced by the fact that 85% said they are “very concerned” about their financial future, up 11% from fourth quarter 2000.
Still, most workers are “not at all concerned” or only “somewhat concerned” that their benefits package may be scaled back as a result of the economic slowdown. However, attitudes varied significantly by the size of the employer. Whereas 51% of employees working for companies with between 11 and 500 employees said they were “not at all concerned,” only 27% of their counterparts from larger companies responded they were “not at all concerned.”
Defined Benefit Popular
When asked to rank overall satisfaction with various work benefits:
- defined benefit retirement plans registered highest with an average ranking of 7.5 (on a scale of 1 to 10 with 10 being most satisfied)
- defined contribution retirement plans ranked at 6.4
The benefits workers most requested their companies to offer included defined benefit plans (24%) and profit sharing plans/bonuses (13%).
Health insurance remains the most common benefit small and mid-size firms offer their employees (89%). Defined contribution plans were the second most common benefit (76%).
When it comes to improvements employees want made in their benefits plans, 40% wished for healthcare plan improvements and 25% wished for improvements in their defined contribution plan.
The survey also showed strong benefit plans continue to be an excellent employee retention tool. Similar to fourth quarter 2000, 75% of respondents agreed that “having a good benefits plan would keep me working for my current company.”