In a news release Mercer said the surge is likely driven by concerns over decreased retirement nest eggs following the recent market downturn. While it could be that the surge indicates participants are already evaluating their total retirement position, Mercer said it underscores the need to encourage employees to do so.
“We are talking to clients and their participants more and more about a ‘total retirement’ perspective, which encompasses defined contribution plans like 401(k)s, DB programs, and outside assets like IRAs, as well as retiree medical benefits—a looming issue for many near retirees and one we don’t feel has been adequately addressed by the retirement industry,” said Andrew Yerre, defined benefit business leader for Mercer’s U.S. outsourcing business, in the news release.
The most recent Mercer Workplace Survey shows that only 39% of employees believe they will have enough money to cover health care expenses in retirement. In addition, according to Mercer’s 2009 National Survey of Employer-Sponsored Health Plans, the number of employers providing retiree medical coverage as a benefit to their pre-Medicare employees fell from 46% in 1993 to only 28% in 2009.
“[I]t ’s incumbent upon providers and employers to encourage employees to consider all their streams of retirement income and benefits, including retiree medical coverage and the health care costs they may incur in retirement,” Yerre said.