Most workers who save for retirement do so through their workplace retirement plan. Some 61 percent of employees view their company’s retirement program as the primary vehicle to save for retirement, and 29 percent of workers say they would not save for retirement without it, according to a Watson Wyatt survey of 2,232 full-time workers released today. These are the features employees say they want from their workplace retirement plan.
A pension. More employees with a traditional pension (62 percent) are satisfied with their retirement program than those with only a 401(k) or similar retirement plan (51 percent). More than half of workers with a traditional pension (52 percent) say their company’s retirement program is a key reason they continue to work for their employer, compared with one third of those with only a 401(k) plan. Workers with a pension are also more likely to want to stay with their employer until retirement (67 percent) than those with only a 401(k) (54 percent).
Flexibility. But many workers want more flexibility than most traditional pensions offer. Half of current full-time workers prefer to have the freedom to make their own investment decisions and are willing to accept investment risks for an opportunity to earn higher returns. And 53 percent of employees would like to be able to take their retirement plan with them when they change jobs.
Guaranteed retirement income. Yet, a significant portion of employees are searching for some additional investment protections, and are even willing to accept lower returns in exchange for them. A quarter of workers would prefer an investment option that offers a guaranteed benefit amount with no opportunity for higher returns and no chance of lower returns. Many employees (39 percent) would also like the option to have their retirement benefits distributed as guaranteed monthly payments for the rest of their life instead of as a lump sum. Younger workers (61 percent) in the survey were especially concerned about their future retirement benefits being reduced or eliminated.
Retiree health insurance. Retiring before you qualify for Medicare at age 65 can mean expensive health insurance premiums, copays, and deductables or even being denied coverage. Almost half (46 percent) of workers would be willing to pay a higher amount out of their paychecks throughout their working life to ensure they have guaranteed medical benefits in retirement and 40 percent would be willing to pay for retiree medical coverage if they retire before age 65.