A news release about the survey conducted by Deloitte, the International Foundation of Employee Benefit Plans (IFEBP), and the International Society of Certified Employee Benefit Specialists (ISCEBS), said 17% of employers polled have seen an increased volume of hardship withdrawals, loans, and other similar activities.
In response to signs of a possible employee pullback, according to the release, a fifth of the 606 plan sponsors surveyed have implemented a re-enrollment campaign to help beef up deferral rates, and more than half (60%) are thinking about making that move.
Some 37% of employers are considering using generational segmentation when making plan design decisions, and another 37% are considering conducting a retirement readiness assessment, according to the news release.
“Because 401(k) plans represent a primary savings vehicle for employers and a key component of the Total Rewards package for employees, our survey indicates that the ongoing affects of the economic downturn have created a source of anxiety for both employers and employees alike,” explained Tim Phoenix, principal with Deloitte Consulting LLP and global leader of Total Rewards services. “With a greater use of 401(k) plan educational tools, the introduction of ease-of-use features and improved organizational communication, we believe employers will be better positioned to help employees meet their personal retirement goals.”
Sixty-three percent of employers surveyed say employees are taking a “wait and see” approach to their retirement savings strategy but concern exists. The majority (60%) said participants held steady at their current level of contribution.
According to the employers surveyed, there is a broad level of employee confusion typically around selecting fund options (84%) and how much money they will need for retirement (53%).
Step-up contributions that automatically increase deferral percentages are offered by 42% of survey respondents, an increase from 35% reported last year. More than half (57%) of surveyed employers reported their employees are now immediately eligible for matching contributions, up from 48% last year.
More Work to Be Done
Overall, the survey found, employers recognize more work has to be done getting employees ready for retirement and that they have to play their part:
- Nearly 63% of surveyed employers indicated they must take an interest in their employees' readiness for a comfortable retirement, and 14% state they feel "very" responsible for preparing employees.
- Nineteen percent of surveyed plan sponsors believe "very few" of their employees will be financially prepared for retirement. According to the employers surveyed, there is a broad level of employee confusion around how much money they will need for retirement (53%).