The Watson Wyatt survey found more employees with defined benefit (DB) plans (62%) are satisfied with their retirement program compared with those with only defined contribution (DC) plans (51%). Some 46% of employees said they would be willing to pay a higher amount out of their paycheck to ensure a guaranteed benefit in retirement.
A Watson Wyatt news release said the poll also found 61% of employees view their company’s retirement program as the primary vehicle to save for retirement, and 29% indicated they would not save for retirement without it.
Sixty-one percent of workers younger than 40 are concerned about their future DB plan benefits being reduced, and 42% are concerned their future benefits will be eliminated as a result of the financial crisis.
More than half (52%) of workers covered by a DB plan said their company’s retirement program is a key reason they continue to work for their employer compared to 33% of those with only a DC plan. Workers with a DB plan are also more likely to want to stay with their employer until retirement (67% versus 54% of those with only a DC plan).
Other preferences of DB plans over DC plans that workers cited include having benefits distributed as guaranteed monthly payments over retirement years (39%) and guaranteed payouts with no opportunity for higher returns, but also no chance of lower returns (25%).
The Watson Wyatt survey found that employees also liked retirement plan features generally associated with DC plans. For instance, 50% prefer to have the freedom to make their own investment decisions and are willing to accept the associated investment risks for an opportunity to earn higher returns.
Fifty-three percent also prefer a plan that participants can take with them when they change jobs.
Meanwhile, two in five workers surveyed said they would be willing to pay a higher amount out of their paycheck to ensure access to health care benefits if they retire before they are eligible for Medicare.
The Watson Wyatt survey was conducted in February 2009 and includes responses from more than 2,200 full-time workers.
The research is available here.