More participants say they lack financial security due to market volatility and higher day-to-day costs. As a result, a growing number of employers are eyeing retirement income solutions, financial advice, and other benefits to boost workers’ confidence, reports the latest MFS DC Plan Sponsor Survey, out today.
The research finds that defined contribution (DC) plan sponsors are increasingly alarmed over their workers’ retirement outlooks. Eighty-six percent of employers surveyed say they are generally concerned about their workers’ retirement, while 97% of small business owners say the same.
While only 34% of workers believe they will be able to retire at the age they want, their employers are even less hopeful. Just 23% are very or extremely confident that participants can retire at their own discretion.
As a result, MFS finds that 45% of plan sponsors are making or considering changes to their fixed income offerings, as 61% of retirement savers admit to changing their investments to more conservative options.
With investors (60%) expressing concerns of inflation impacting their retirement savings, 35% of plan sponsors have also made or are considering adjustments to inflation-protected investment offerings.
Others are moving to offer professional financial advice, as 70% of employees voice interests in receiving guidance. According to the findings, 82% of plans either currently provide or are contemplating providing advisor services to their workers.
“It is clear that workers’ anxieties about retirement have grown in the face of persistent inflation and economic concerns, and plan sponsors recognize this and are responding in real time,” said Jeri Savage, lead retirement strategist at MFS. “Yet plan sponsors also understand the long-term nature of retirement savings and that there is no one-size-fits-all solution to these concerns, which is why an emphasis is being placed on personalized, customizable advice.”
As a higher number of workers (63%) say they are considering phased retirements, about half of employers (49%) surveyed said they currently hold or are thinking of adding programs that would allow workers to gradually move into retirement by allowing them to work reduced hours.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.