A survey from the LIMRA Secure Retirement Institute shows one-third of plan sponsors give their retirement plans an A, and 46% give their plans a B. However, only one-quarter give an A grade to employees’ retirement savings habits, and 36% give employees’ savings habits a B.
Nearly three out of ten (29%) plan sponsors said employees’ savings habits deserve a C grade, 8% give them a D and 1% an F. Seventeen percent of respondents give a C grade to their own retirement plans, 3% a D and 1% an F.
According to the survey, three-quarters of plan sponsors say helping their employees save enough for retirement is one of the three most important factors in their retirement benefit strategy—nearly four in 10 say it is the top factor.
“These findings suggest that while employers want to help their employees save for retirement, they do not feel their actions or plan design is responsible for their employees’ retirement savings habits,” says Kathleen Rook, assistant research director, LIMRA Secure Retirement Institute. “Research shows that tools like auto-enrollment and auto-escalation can have a measurable impact on employee participation and savings rates, yet only a third of plan sponsors offer these features in their plans. These findings indicate opportunities for plan providers and advisers to help employers manage costs and leverage tools to help employee savings habits.”
The LIMRA Secure Retirement Institute surveyed more than 1,500 plan sponsors in late 2013 and early 2014.