Although the percentage of employers offering matching contributions to their 401(k) or similar plan is consistent with last year’s survey (70% versus 69% the year prior), the survey found an encouraging sign that 51% of companies that recently decreased or suspended the match plan to reinstate it within the next two years.
Most employers (85%) believe that a 401(k) or similar plan is important for attracting and retaining employees, and most (85%) believe their employees view these plans as an important benefit.
However, according to a press release, plan sponsorship rates of 401(k) or similar plans are significantly higher for large companies (94%) than small companies (76%). Large companies (79%) also continue to be more likely than small companies (69%) to offer a matching contribution to their 401(k) or similar plan.
Of those small companies that do not currently offer a 401(k) or similar plan, only 21% indicate they are likely to begin offering a plan the next two years; however, a higher percentage (34%) indicate they would be likely to consider joining a multiple employer plan. Of companies that are not likely to offer a 401(k) plan in the next two years, the most common reasons are: difficult business conditions (47%), concerns about cost (43%), and perceived lack of employee interest (43%).Underscoring a significant change from the year prior, 59% of employers expect their company’s financial situation to improve over the next 12 months (up from 49%) and almost half of employers (48%) expect the economy to improve over the next 12 months (up from 45%). Based on the study, employers are generally reporting higher levels of employment, with over half (55%) hiring additional employees in the last twelve months. This positive trend is more prominent with large companies where 69% hired workers compared to 54% of small companies. Additionally, fewer companies implemented layoffs or downsized in the last twelve months – 33% compared to 48% last year.
Education and Advice
The results of the 12th Annual Transamerica Retirement Survey reveal most employers (82%) feel their employees do not know as much as they should about retirement investing. Similarly, while there has been a gradual decline over the last three years in employers agreeing their employees could work until age 65 and still not save enough to meet their retirement needs, a full 70% of employers still agree (down from a high of 80% two years ago).
According to the press release, since the recession began, few employers (15%) indicate they or their retirement plan provider has implemented any programs to help employees get back on track with their retirement savings. Large companies have been much more likely (34%) than small companies (13%) to have implemented any such programs.
Employers also have an opportunity to help employees transition into retirement. Among those employers who offer a 401(k) plan, 43% offer financial counseling and 19% offer pre-retirement seminars for employees who are transitioning into retirement. Large companies are more likely to offer both, with 53% of large companies offering counseling and 46% offering seminars. (In contrast, of those employers who do not offer a plan, 78% do “nothing” to help their employees).The results of the 12th Annual Transamerica Retirement Survey – conducted among a nationally representative sample of 743 U.S. employers by the non-profit Transamerica Center for Retirement Studies – are here.
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