The economy may be picking up some, but you wouldn’t know it from the latest Mercer Workplace Survey. Issued by Mercer’s outsourcing business, it found only 19 percent of participants with employer-sponsored defined-benefit plans are very confident that they will receive income from their pension plan in retirement. That figure is down from 24 percent in 2008.
Conversely, just under half of the participants are “somewhat confident” (35 percent) or “not at all confident” (11 percent) that they will receive some DB pension income. (The link in the paragraph above, by the way, explains the study a little and includes another link at the top right of the page to the complete and free PDF download).
Andrew Yerre, Mercer’s U.S. business leader, says the findings “should cause concern for any plan sponsor who offers a pension plan.”
“Clearly,” he says, the past two years of economic volatility have caused participants to become very anxious about all aspects of their retirement readiness, including pension benefits.”
Yerre says the anxiety points to a general lack of knowledge about these plans by employees. “As we know,” he says, “these types of plans can be expensive and complicated to offer and administer, and the fact that participants have such little confidence may point to a lack of understanding, trust and engagement.”
He says the findings “further suggest that DB-plan sponsors need to better educate participants around their entire retirement-plan offerings. “There is a real strategic opportunity,” he says, “for plan sponsors to not just promote the existence of DB plans, but to also highlight their long-term value as part of a total rewards and comprehensive retirement-planning program that could include a 401(k), IRA or other investments.”
Strange, for all the stories we’ve been writing in the last few years about employers implementing better and more focused communication strategies around their retirement offerings, I guess this survey suggests there are still a whole lot out there that aren’t quite there yet. Hey, no time like the present, considering the “win-win” piece to it all.