Are Employers Worried Enough About Worker Retirements?

Who’s more confident about worker retirement preparations: workers or their employers?

A new survey finds that while 59% of sponsors say the majority of their participants are saving enough to retire with the income they will need, only 28% of the participants surveyed are confident they are saving enough. On the other hand, according to the BlackRock Defined Contribution (DC) Pulse Survey, nearly half (49%) of plan sponsors surveyed agree that “my organization is facing an impending ‘retirement crisis’ where participants will keep working because they are unable to afford to retire.”

There is also an education gap: Two-thirds (64%) of sponsors say their participants are “very” or “extremely” informed about how much money they should be saving today for retirement, but only 37% of employees say they are.

Another expectations gap is retirement income: while 58% of plan sponsors say workers are either “very” or “extremely” informed on how to generate income from their retirement savings, just 31% of workers say they are.

The BlackRock survey found that overall, 55% of workers say that their employer should provide more help, and that the younger the cohort, the more decided the call for help: 63% of Millennials think their employer should be doing more to help them prepare for retirement versus just 47% of Baby Boomers.

Plan sponsors also are focusing on their older participants: 60% say they would like to find ways to encourage participants to stay in the plan after they retire.

Generation Gaps

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, 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.

BlackRock’s Defined Contribution Pulse Survey polled 1,003 participants in DC plans and 200 DC plan sponsors nationwide on a broad range of retirement planning issues and challenges in October through November 2015.

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