Time flies. It’s been a decade since the passage of the Pension Protection Act, and a new survey commemorating the anniversary finds that employees still feel employers aren’t doing enough with retirement security.
The “BlackRock Defined Contribution (DC) Pulse Survey” reports that 59 percent of 401(k) plan sponsors say the majority of their participants are saving enough to retire with the income they will need, but only 28 percent of the participants surveyed are confident they are saving enough, reflecting a major disconnect.
Similarly, 64 percent of sponsors say their participants are “very” or “extremely” informed about how much money they should be saving today for retirement, but only 37 percent of employees say they are.
Companies and workers are also far apart on the topic of retirement income: 58 percent of plan sponsors say workers are either “very” or “extremely” informed on how to generate income from their retirement savings; just 31 percent of workers say they are.
The BlackRock survey makes clear that workers–particularly younger workers–are eager for greater support for their retirement planning. In total, 55 percent of workers say that their employer should provide more help. The younger the cohort, the more decided the call for help: 63 percent of millennials think their employer should be doing more to help them prepare for retirement, versus just 47 percent of baby boomers.
More specifically, the survey revealed considerable differences among generational groups when it comes to levels of retirement planning – suggesting that plan sponsors need to think about targeted approaches in delivering support.
Millennials (age 25-34) see their retirement futures as bright – they are the most likely to affirm that they are on track with their retirement planning, and also most likely to be highly confident about one day enjoying the kind of retirement lifestyle they want. But at the same time, many are less involved in actual planning than workers in other generations. For example, less than 25% say they have evaluated their plan’s investment options and features, and only about one third (36%) have increased contributions to their plan when possible.
Compared with other generations, Gen X’ers (age 35-50) are generally least confident about attaining retirement goals, including meeting their month-to-month expenses in retirement and leaving a financial legacy to their family. Gen X’ers also feel less informed about certain key aspects of their plan and the planning process, including how to generate retirement income from their savings and whether they are on track for retirement.
Baby boomers (age 51-69), for their part, are split on what to do with their retirement savings when they retire, with 24% saying they are “not sure” what to do.