Benefits May 24, 2007

Employees Look Outside the Workplace for Retirement Planning

May 24, 2007 (PLANSPONSOR.com) - Nearly half of adults in the U.S. have the option of participating in a 401(k) plan, but only 3% of employees say they go to their employers for investment and retirement advice, according to a recent poll.
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The poll of about 2,300 adults by theWall Street Journal Online/Harris Interactive Personal Finance Poll also showed that in terms of other benefits offered by employers, employees said they received:

  • benefits through their employer, 69%
  • insurance, such as life insurance, disability insurance or workers’ compensation, 56%
  • 401(k) matching contributions, 36%
  • pension plan, 29%
  • company stock, 13%
  • equity compensation plans such as stock options plans, 9%

Where Employees Look for Financial Advice

About 40% of workers make their own investment and retirement decisions based on personal research or advice from their family and friends, 20% rely on financial advisers for advice and only about 3% look to their employers for investment and retirement guidance.

Nearly two-thirds of employees (66%) say that their employers play a minor role or no role in their retirement preparations, compared with just 12% who say their employer plays a major role.

Respondents who earn more are more likely to say their employer played a major or important role in their retirement preparations, but even among respondents who earn more than $75,000, 59% report that their employer played a minor/no role. For those who make made less than 35,000, 80% said their employer played a minor/major role in their retirement planning.

Greater Education Equals More Retirement Options?

College graduates are more likely to land jobs with more likely to land jobs that offer a greater variety of financial planning. Thirty-three percent of employed respondents who are college graduates saying their employer offers a generous company match for 401(k) contributions, while only 16% of high school graduates say the same thing.

According to the survey, 69% of those college graduates say their employer encourages financial planning or retirement preparation, compared to 45% of those with a high school diploma.

College grads also say that their employer invites professionals to provide financial or retirement-planning workshops, where only 8% of those with a high school education or less have this same opportunity.

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