While more than three-quarters (79 per cent) of U.S. employees say they’re satisfied with their employer-sponsored pension plan, 76 per cent say they’re concerned about their capacity to save for retirement due to economic volatility, according to a new survey by Arthur J. Gallagher & Co.
The survey, which polled more than 300 employees and more than 200 employers, found while nearly all (91 per cent) employers believe they offer competitive retirement packages, nearly two-thirds (61 per cent) of employees believe they could find a better package with a different employer. A majority (70 per cent) of employees believe employer-sponsored pension plans are key to funding their retirement.
More than a third (35 per cent) of employees cited the rising cost of living as the No. 1 impediment to saving for retirement, followed by personal debt (20 per cent) and family obligations (11 per cent). Indeed, more than half (53 per cent) of employees said they’d prefer a $500 pay increase over a $500 increase in retirement contributions and 79 per cent of employees said they’d like their employer to offer supplemental savings accounts such as emergency savings accounts.
Read: 84% of employers say they’re concerned about a retirement income crisis: survey
Roughly half of employees (52 per cent) and employers (49 per cent) said increasing employer matching contributions is the best way to improve retirement plans. However, 39 per cent of employees said they’re unsure if they contribute the required percentage of their annual salary to receive the full company match.
Among employer respondents, more than half (57 per cent) said they offer or plan to offer matching retirement contributions for student loan payments and the same percentage of employees said they’d welcome this enhancement.
“With rising inflation, it’s not surprising that employees are concerned about their ability to save for retirement and this, in turn, is reflected in the perceived value of employer-sponsored retirement plans,” said Tonya Manning, U.S. wealth practice leader and chief wealth actuary at Buck (now part of Gallagher), in a press release. “[Defined contribution] plans have evolved to become the primary retirement savings vehicle for Americans and, for plan sponsors, the challenge is how to help participants reach their savings goals.”
Read: Survey finds 74% of workers say it’s important for employers to offer retirement savings options