Participants are ready for auto-initiatives
It’s no secret that a retirement plan is one of the most effective ways to help employees save for retirement, and it looks like participants share that view. New research shows that more than 8 out of 10 participants view a plan as one of their most important benefits. In fact, 8 out of 10 participants would prefer a 100% match on their contribution up to 3% rather than a 3% salary increase — and 75% of those surveyed feel the same even when the figure is raised to 6%. Even without an employer match, about two-thirds of employees would choose to work for a company offering a retirement plan over one that doesn’t—even if a competing company offered a 5% higher salary.
And when it comes to saving, participants’ single biggest regret is not saving enough for retirement. That explains why 80% of participants want at least a “slight nudge” from their employer to help them save for retirement. Seventy percent believe their employer should use auto-enrollment at a 6% contribution rate and show interest in a regular, incremental automatic increase.
Source: American Century Investments Annual Plan Participant Study