According to a news release by the International Foundation of Employee Benefit Plans (IFEBP), in a recent survey of retirement plan sponsors and trustees, 46% of respondents stated their employees and plan participants are considering a delayed retirement.
Survey respondents not only reported a jump in the number of plan participants considering delaying retirement, but a quarter of respondents cited an increase in the number of eligible workers postponing retirement.
In addition to delaying retirement, nearly 30% of respondents report that defined contribution (DC) participants have decreased their contributions and 34% believe plan participants have reduced their exposure to equities in favor of less risky investment alternatives, IFEBP said.
Survey results show that during the last six months, 28% of plan sponsors have noticed an increase in the number of participants taking loans from DC accounts. Representatives of corporate plans were much more likely to observe this trend, with 44% reporting an increase.
In addition, 29% of respondents believe the current economy has prompted greater numbers of hardship withdrawals, IFEBP said. Again, corporations (37%) were more likely than public (24%) and multiemployer (21%) to note this hike.
Corporate sponsors were the most likely to report that participants are primarily concerned about their inability to save enough for retirement (51%), while representatives of multiemployer and public plans were most likely to report underfunded defined benefit (DB) plans as the major concern of their plan participants (55% and 39% respectively), IFEBP said.
DC sponsors were more likely to report that their plan participants view the long-term impact as severe (31%), compared to 19% of DB sponsors who think their participants feel that way. In addition, 38% of plan sponsors noted that their employees are concerned about not saving enough for retirement.
In response to increasing concern, 20% of defined benefit plan sponsors have made changes to their asset allocation in order to reduce risk and protect assets. Only 7% of defined contribution plan sponsors have made changes to their investment product offerings as a result of the economic turmoil; however, 22% are considering making changes in the future.
The survey was conducted the week of October 20, 2008 and includes responses from 1,089 plan sponsors representing a cross section of three employee benefit sectors: Corporate Plans, Public and Governmental Plans, and Multiemployer Plans.