While a balance in their 401(k)s makes retirement savers feel more assured, defined contribution plan sponsors are expressing less confidence in their participants’ ability to fund retirement, according to BlackRock’s 2018 DC Pulse Survey.
In this year’s survey, more than half of defined contribution plan sponsors, 54 percent, felt like the majority of their plans’ participants needed to delay retirement. In last year’s DC Pulse Survey, only 34 percent of plan sponsors felt that way.
According to BlackRock, more than half of plan sponsors have made changes within their plans—such as selecting new default alternatives, raising default contribution rates and changing the company match to try to stimulate more retirement saving. Of the plan sponsors in the survey, 83 percent are actively encouraging participants to keep their assets in the plan after they retire.
Retirement plans may have the ability to help participants save for retirement, but both sponsors and participants agree that more assistance is needed to plan for retirement spending and income. In the DC Pulse Survey, 93 percent of participants wanted help with retirement income, and 90 percent of plan sponsors felt responsible for providing some support to help participants address spending needs. Nevertheless, only one in three plan sponsors currently provides guidelines on withdrawal rates.
Plan participants were highly confident about their financial situations: Over 90 percent of those surveyed reported being overwhelmingly satisfied with their retirement plans. Positive sentiments like “hope,” “comfort” and “optimism” were associated with their financial situations.
Most of the survey participants, 60 percent, attributed their confidence to market performance—according to BlackRock, this is a sign that plan participant confidence strongly correlates to market performance.
For its 2018 DC Pulse Survey, BlackRock interviewed 1,000 plan participants and 228 plan sponsors earlier this year.