Retirement Plan Participants Want to Be Socially Responsible

Nine in 10 want investments to align with values.

Responsible investing options resonate with retirement plan participants, as nearly nine in 10 say they want their investments to align with their values, according to a survey by Calvert Investments.

However, there is a need to further educate participants given that only 37% say they are familiar with the term “responsible investing.” After being read a definition of responsible investing, seven in 10 (72%) indicate a likelihood to invest in a responsible investing product in the next 12 months and, among these participants, 47% prefer to invest with a firm that specializes in responsible investing.

The vast majority of participants (89%) find the concept of responsible investing appealing, with four in 10 saying it is highly appealing. Ninety percent of eligible non-participants also find the concept appealing. More than half of eligible non-participants (56%) indicated they are more likely to participate in their retirement plan if it offers a responsible investing option.

Eight-two percent of respondents indicated they are likely to select a responsible investment option if offered by the plan, with nearly one-third of those interested claiming they would direct all their plan contributions to responsible investments. Millennials were the most motivated, with 46% of that segment indicating they would direct all of their plan contributions to responsible options.

Two-thirds of participants assume responsible investing funds will be as good as or better than other mutual funds in terms of risk, volatility and performance.

The survey found satisfaction with and likelihood to recommend one’s employer is higher among plan participants who are pleased with their retirement plan, and that retirement plan satisfaction is higher when participants believe responsible investment options are offered. The study also found that perceiving an employer as trustworthy and a good corporate citizen is just as or more important to company loyalty as perceiving the firm as providing competitive salary and offering good benefits. 

Calvert surveyed 1,231 defined contribution retirement plan participants, including 401(k), 403(b) and 457 plan participants, and 295 eligible non-participants between July 29 and August 10. A report of selected highlights is available here.