Workspan logo

Employees Prefer Predictability When It Comes to Retirement

Image

Now more than ever, retirement savings are at the forefront of many employees’ minds. And the role an employer plays in retirement savings has transformed as a result. However, the standard practice of an organization contributing money to their employees’ retirement savings might not be the desired method.

In its “Role of the Company Survey,” MetLife found that 58% of employees would prefer their employer provide a set retirement paycheck for life. Americans have accepted the shift in responsibility for their own retirement security, as 54% said that individuals are primarily responsible for their own retirement security, compared to 27% who said companies and 19% who said government.

But employees want a partner in their retirement planning and they want their company to fulfill that role, as they were six times likelier to want companies to be more involved — not less — in providing for their retirement security in the next five to 10 years (61% vs. 9%).

While most individuals will likely have retirement savings through a combination of individual accounts, employer-sponsored solutions and Social Security, company-sponsored solutions were preferred. If given a choice to direct their dollars, company-sponsored retirement accounts were vastly preferred by three to one compared to government solutions, as 74% said they would rather set aside part of their salary in a company-sponsored retirement account versus 26% who preferred paying into Social Security. Even when asked to choose between saving on their own or paying into Social Security, going it alone was preferable by 56% to 44%.

“Employees recognize the important role their employers can play in planning for retirement,” vice president of institutional income annuities at MetLife. “They want a trusted partner who can help them navigate retirement security, creating an opportunity for companies to help their employees plan and save.”

Despite being the generation closest to retirement, only 14% of Baby Boomers said they want the government to be primarily responsible for retirement security, while 24% of Millennials feel that way. There is no significant difference between Millennials’ and Boomers’ preferences for steady income in retirement — both groups equally favor a set retirement check from their employer rather than receiving money from their employer to invest on their own.

This similarity shows the recognition of the preference for a guaranteed retirement income, a paycheck in the form of a pension payment from a traditional defined benefit plan, or an annuity purchased using retirement savings from a defined contribution plan, such as a 401(k) plan. The traditional defined benefit plan is fading from the workplace and a less common offering for younger workers, while defined contribution plans are more prevalent for workers today.

Have Questions?

Phone

+1 877 951 9191

USA and Canada

+1 480 951 9191

Other Countries

Online

Chat currently unavailable.

Email Us