Workplace Retirement Plans Increasingly Important
Twenty-two percent expect a defined benefit (DB) plan to be the most important means of preparing for their retirement—compared with 21% who give this importance to government retirement benefits. Only about one in 10 employees expect other forms of personal plans and long-term savings to provide the majority of their retirement income.
The survey found workplace plans remain a central part of many people’s retirement planning: 67% agree with the statement that such plans are “a basic part of any worker’s pay.”This agreement ranges across countries from highs in the U.S. (78%), the U.K. (76%) and the Netherlands (74%) to lows in countries such as France (63%) and Hungary (55%).
The idea of shared responsibility was also discovered by the survey; 75% of respondents agreed that funding retirement “should be a balanced approach in which individuals, employers and the government all play an equal role.” A majority of employees in all countries agree that employers should continue to provide for employees’ retirement plans. This peaks at 84% of employees in the Netherlands, the U.K. and the U.S.While retirement benefits rated lower than basic pay as a tool for employee recruitment and retention (69% of employees view salary as extremely important), 36% thought that having access to a workplace retirement plan with employer contributions was “extremely important.” This peaked in the United States at 49% – compared to 44% in Poland, 42% in the United Kingdom and just 27% in Sweden.
However, when viewed alongside other non-salary benefits such as life or health insurance, and stock options, company retirement plans ranked highly. The survey found this to be less true in the U.S. where access to public health care is more limited and employees look to employers to make some provision towards the high cost of private medical insurance.
These findings are in the second report from The Changing Face of Retirement research from AEGON and the Transamerica Center for Retirement Studies. The first report stressed that current workers expect to be worse off in retirement than current retirees (see “Global Outlook for Future Retirement Bleak”).
The second report is here.