According to “The Changing Face of Retirement: the Aegon Retirement Readiness Survey 2013,” conducted by Aegon, the Transamerica Center for Retirement Studies and Cicero Consulting, only 20% of 12,000 individuals polled in 12 countries claim to have any understanding of financial matters pertaining to effective retirement planning (see “Retirement Unpreparedness Is a Global Problem”).
When asked what services their employers or retirement plan administrators offered to help them prepare for retirement, 22% said they are given an annual retirement plan statement, 13% said they have access to an employer or retirement plan administrator website and 12% indicated they are offered an in-person meeting with a retirement plan adviser. Twelve percent said they are given educational materials, 8% have access to online retirement modeling tools, and 6% are offered webcast meetings and/or seminars about their pensions and saving for retirement.
The survey found more individuals in the U.S. have access to an employer or retirement plan administrator website (28%), are offered in-person meetings with a retirement plan adviser (23%), are given educational materials (24%) and have access to online retirement modeling tools (18%) than individuals in other countries.
According to the survey, when offered these services or tools, the majority of individuals find them somewhat to extremely helpful in preparing for retirement:
- Annual statement: 88%;
- Employer or administrator website: 84%;
- In-person meeting with adviser: 86%;
- Education materials: 85%;
- Online retirement modeling tools: 92%; and
- Webcast meetings and/or seminars: 84%.
The survey report offers recommendations toward addressing retirement risks based on the more balanced roles of government, employers and individuals.
During a webcast about the findings, Angela Seymour Jackson, managing director of workplace savings at Aegon UK, offered the following recommendations:
- Retirement systems vary by country yet the fundamental need to achieve retirement readiness through a balance among governments, employers and individuals is the same. Government benefits require reforms to remain sustainable. Employers are evolving from pension providers to enablers. Personal responsibility is now paramount.
- Governments and employers have de-risked their pension offerings and transferred those risks to individuals – which has led to a greater financial reliance and “squeeze” on families. As governments and employers implement such changes, their plans should include resources to help individuals take personal responsibility so they can de-risk their own personal retirement.
- Policy makers and employers can help employees by enabling longer working careers, providing options for a phased retirement, and offering benefits (e.g., life insurance, disability, long-term care) that can financially protect them if they are unable to work. Employees should have a backup plan if forced into retirement sooner than expected.
- Equipping individuals with the right toolkit and confidence to ask good questions and make informed decisions is critical for success. Retirement readiness is more than just saving and investing, it involves setting goals about lifestyle, income needs, and family support, as well as charting a clear path for achieving them. Employers can play a greater role in offering ‘retirement preparation services’ to their employees.
- Providing financial and protection products can help individuals de-risk their retirement with certain guarantees and help avoid investment losses, long-term care expenses, or erosion due to inflation.