State of the Industry
Capturing Their Voices
Participants provide valuable insights for plan sponsors
The 2019 PLANSPONSOR Participant Survey found that a retirement plan’s initial automatic deferral rate plays an important role in what employees save. Twenty-eight percent of plan participants said they accepted the default deferral rate. Perhaps because that rate is typically low, 41% of respondents save 5% or less—a more sizable group than the 34% last year and 35% in 2017.
The good news is that the percentage of employees saving more than 10% has remained steady. It was 21% this year, down slightly from 22% last year and 24% in 2017.
Despite market highs, retirement confidence is slipping, and reported total retirement savings has remained stagnant. Fifty-five percent of respondents have less than $100,000 in total retirement savings, up from 48% last year and 49% in 2017. A mere 30% have saved more than $150,000.
Regardless of their savings size, 48% said they are either “confident” or “very confident” they will be able to achieve a comfortable and secure retirement by their planned retirement date.
The number of people who want to retire before age 65 has reached a threeyear high: 36%. This could be surprising, given how many need to save so much more, yet might coincide with the $250,000-plus in savings group. Twenty-two percent expect to work until 70 or older.
The survey also revealed that, as someone’s balance grows, he is more inclined to work with an adviser. Only 10% of those with less than $50,000 saved have an adviser, but this jumps to 36% for those with over $250,000.
Asked what source of advice they prefer in relation to saving for retirement, the most commonly cited was advisers, by 31%. Respondents also checked off printed brochures (18%), group meetings (12%), and podcasts (10%), etc. —PS