RESEARCH |

2019
Participant Survey

Capturing Their Voices: Participants provide valuable insights for plan sponsors

Reported by PLANSPONSOR | Art by Dalbert B. Vilarino
Findings
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Findings

Respondents

Gender

  • Female
  • Male

Age

  • <30
  • >50
  • 30 – 50

Total Retirement Savings

  • Not Reported
  • <$50,000
  • $50,000 – $250,000
  • >$250,000

Household Income

  • <$50,000
  • $50,000 – $100,000
  • >$100,000

Employer Size

  • <100 employees
  • 100 – 499 employees
  • 500 – 999 employees
  • 1,000 – 5,000 employees
  • >5,000 employees

Highest Educational Achievement

  • High school graduate
  • College graduate
  • Post-graduate degree/studies

Overall

Household Finances

Has family budget
31%
Has emergency fund
43%
Is paying off student loan(s)
22%
Uses a financial adviser
20%

Expected Retirement Age

Before 65
36%
65 - 70
53%
After 70
11%

Actions taken in previous 12 months

Increased deferral rate
43%
Changed asset-
allocation strategy
17%
Rebalanced account
16%
Calculated retirement income
16%

Participant’s Deferral Rate

≤5%
41%
>5% – 10%
33%
>10%
21%
Don’t know
5%

Participants With >10% Deferral Rate, by Age

Under 30
12%
30 - 50
42%
Over 50
35%

Participants Who Use a Financial Adviser, by Retirement Savings

<$50k
retirement savings
10%
$50k – $100k
retirement savings
16%
>$100k – $250k
retirement savings
27%
>$250k
retirement savings
36%

Likelihood That Employees Not Covered by a DC Plan Would Participate in One if It Were Available

Likely to participate
72%
Unlikely to participate
20%
Unsure
8%

Households With Total Retirement Savings <$50,000, by Household Income

<$50k
household income
84%
$50k – $100k
household income
45%
>$100k
household income
18%

Participants Deferring >5% of Salary, by Total Household Income

<$50k
household income
84%
$50k – $100k
household income
50%
>$100k
household income
71%

How Would You Prefer to Receive Information on Financial Wellness?

Read a short brochure with
3– 5 actionable steps
18%
Attend a 90-minute
group seminar
12%
Read newsletter via email
14%
Browse an interactive,
online library
15%
Meet with an adviser for
30 minutes
31%
Listen to an informative
30-minute podcast
10%


Hypothetical Trade-Off Scenarios

Respondents were presented with two options for each of the following scenarios and selected their preference

Respondents were presented with two options for each of the following scenarios and selected their preference



Sponsor Feedback/How Providers Can Improve

The defined contribution (DC) industry has evolved since 2014, the year of our first PLANSPONSOR Participant Survey, but participants remain largely unchanged in how they value—and would trade off—employer benefits.

As a general rule, employees prefer benefits that deliver greater vs. quicker financial impact. For example, 61% of respondents prefer a 6% match that becomes vested after five years to a 3% match that is immediately vested. Similarly, a record 53% of respondents now prefer a $2,500 matching contribution to a $1,500 employer contribution that does not require that employees pay in. This perhaps reflects a growing acceptance by employees of their role in saving for retirement.

Further, our 2019 survey confirms that DC plans can help “attract and retain” employees—within limits. This year, 56% of respondents would choose an employer with a 401(k) but offering 10% less pay to one that offers 10% more pay without a plan. However, loyalty appears to have its limits, as that number drops to 42% when the pay gap is 20%.

When choices have no clear difference in value, employees lean toward shorter-term benefits. A slim majority (53%) would opt for a one-time $5,000 bonus over a one-time $5,000 contribution to a 401(k) account, while a more decisive 60% of those with student debt would opt for a $1,000 employer-sponsored student debt payment over a $1,000 contribution to a 401(k) account. —PS