|Copyright:||Targeted News Service|
|Source:||Targeted News Service|
BROOKFIELD, Wis., Sept. 9 — The International Foundation of Employee Benefit Plans issued the following news release:
A new survey published by the International Foundation of Employee Benefit Plans looks at employer retirement plan offerings in the midst of a skittish economy. The survey examines four types of U.S. organizations–corporations, professional service firms, public employers and multiemployer plans–and finds that not only are employers maintaining retirement benefits, but they are also implementing features like automatic enrollment and retirement counseling to assist employees in building a secure retirement.
“The lingering effects of the recession have prompted workers to closely examine their retirement saving and investment strategies for the future. For many, employer-provided retirement plans will be a significant component of their retirement income,” explained Julie Stich, Senior Information/Research Specialist at the International Foundation. “The survey found that most employers are committed to offering some sort of retirement vehicle, but the type of plan varies greatly by organization type.”
As expected, defined benefit (DB) plans (pension plans that provide retirees with a guaranteed monthly payment in retirement) are most common among public employers (88%) and multiemployer plans (88%). DB plans are less common among corporations (41%) and professional services firms (19%). Although the circumstances of the past several years have caused some employers to freeze or terminate their pension plans, the majority of respondents (79%) report they have not taken this action. Multiemployer plans were least likely to have frozen their plan (8%), corporations the most likely (30%). Only 3% of respondents indicated they had terminated a plan.
“While traditional pension plans are less prevalent than in the past, many employers offer a 401(k) or other type of defined contribution plan to ensure that employees will save for retirement,” stated Stich.
Defined contribution (DC) plans such as 401(k) plans, are most common among corporations (83%) and professional service firms (77%); they are less popular among public employers (61%) and multiemployer plans (58%).
The survey found that most employers offering a DC plan provide matching contributions. Availability of a match varies: 81% of corporations, 68% of professional service firms, 57% of public employers and 9% of multiemployer plans offer a match. The most common match reported is 50 cents per dollar on the first 6% of salary deferred. A small percentage of employers, 6%, report they have ceased matching contributions within the past two years.
A number of automatic features are being introduced to increase employee participation in DC plans and to help employees manage their investments. The survey found that nearly three in four employers, 72%, use automatic features in their plan. Of these employers, the most popular automatic feature offered is target-retirement-date investment funds (71%). Just over half (51%) have a provision that allows the employer to automatically contribute a percentage of the worker’s pay to a plan unless the employee opts out.
“Employees may be unaware of the importance of saving for retirement at an early age or don’t consider saving a priority when paychecks are stretched thin. Automatic enrollment provides the first step toward building a retirement income and few employees opt out of plan participation once they’re enrolled,” says Stich.
Taking additional measures to help employees invest wisely, 44% of employers report that they offer financial or retirement planning opportunities to their employees. For workers suffering stress or anxiety from credit card debt or other financial issues–factors that hinder saving for a secure retirement–81% of employers report offering employee assistance plans (EAPs).
About The Survey
Employee Benefits Survey: U.S. and Canada 2011 was conducted by the International Foundation of Employee Benefit Plans in March and April 2010. The survey results include responses from 1,315 individuals representing four types of organizations in the U.S. and Canada. For the purpose of this survey, employer types are defined as follows:
* Corporations – Single employers, including both publicly traded and private organizations
* Professional service firms – Accountants, actuaries, administrators, attorneys, bank and trust companies, consultants, insurance companies, investment advisors, etc. who serve the employee benefits industry
* Public employers – Municipalities, counties, states, provinces and federal governments
* Multiemployer benefit plans – Benefit plans maintained under one or more collective bargaining agreements to which more than one employer contributes and that are governed by a joint board of trustees with equal representation from labor and management.
Individuals surveyed were members of the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists.
Employee Benefits Survey: U.S. and Canada, 2011 (Item #6924) is published by the International Foundation. The 100-page survey costs $89 ($60 for Foundation members). To order visit www.ifebp.org/books.asp?6924 or contact the Foundation Store at firstname.lastname@example.org or (888) 334-3327, option 4.
TNS hc11-JF78–100911-2997859 StaffFurigay