The IFEBP said 27% disagreed or strongly disagreed with that assessment during the September 2009 poll, while 33% were neutral. In either case, 87% agreed a recovery will come more slowly than in past recessions.
Sally Natchek, IFEBP senior director of Research, said the group’s September survey was the final of three taken in the last year to assess employers’ and workers’ responses to the economic crisis. The other polls were in October 2008 and May 2009.
According to Natchek, the first survey found a cautious approach where employers were waiting to see how the events in the economy played out. By the following spring, employers were in a more active mode as layoffs increased, and findings of the latest survey show employers and employees have reduced risk exposure in their retirement plans.
Throughout the last year DC plan sponsors were more likely than DB plan sponsors to report their employees viewed the long-term impact of the crisis as severe. In September 2009, 25% of DC plan sponsors thought the majority of their employees perceived the long-term impact on their retirement as severe, half of the 47% that perceived the impact as severe in May 2009, and lower than the 31% who reported a severe impact in October 2008.
In September 2009, 43.8% of employers reported employees were decreasing their overall contributions to DC accounts, the announcement said. This number is relatively unchanged from the 44.1% of employers who reported decreased contributions in May 2009 and up from 28.2% who noted the trend in October 2008. Thirty-seven percent of employers in September 2009 also reported an increase in the number of participants stopping contributions, dropping slightly from the 40% who reported the trend in May 2009.
Forty-five percent of employers noted an increase in the number of employees making hardship withdrawals from their DC accounts in September 2009, up slightly from 42% in May. In October 2008, 29% of employers noted an increase in hardship withdrawals. The surveys reveal a similar pattern for employers reporting an increase in employees taking loans from their DC accounts (28% in October 2008, 40% in May 2009 and 39% in September 2009).
The September 2009 survey found that as a direct result of the financial crisis, 42% of DB plan sponsors revisited their asset allocation policies, 37% reviewed their actuarial assumption and plan design, and 27% increased their risk management focus. DC plan sponsors have reacted to the crisis by reviewing their fund lineup (28%), adding more low-risk investment choices (26%), and increasing diversification (24%), according to the news release.
As of September 2009, employers reported that their employees’ main concern was market losses in funds and underfunded retirement plans (47%), followed by less job security (31%) and delayed retirement (21%). This is a change from May, when decreased job security was cited as employees’ main concern (48%) and from October 2008 when delayed retirement was the main concern (46%).
When it comes to headcount issues, survey results show that in the last year 52% have reduced their workforce or laid off employees, 49% have implemented a hiring freeze, 42% have frozen wages, and 16% have reduced wages.
Of the employers responding to the survey, 3% plan to make layoffs in the next six months, 2% expect to implement a hiring freeze, 4% plan to freeze wages, and 3% expect to reduce wages. Although employers are optimistic they will not have to make more cuts, the vast majority (90%) do not expect to increase hiring in the next six months.
"Pension Plans: Impact of the Financial Crisis-Survey Results, September 2009 Update," was conducted in September 2009. Responses were received from 850 individuals representing retirement plans in the United States.
The 17-page survey (Item #6597B) is free to foundation members. Nonmembers may purchase a copy for $50. To order visit www.ifebp.org/books.asp?6597B or contact the Foundation Bookstore at email@example.com or (888) 334-3327, option 4.
« Employer Suit in Sham Divorce Pension Scheme Dismissed