Employers, as well as employees, realize the importance of employer-sponsored retirement plans, according to the LIMRA Secure Retirement Institute.
Ninety-eight percent of employers said it is important to offer employees a defined contribution plan and two thirds added that it is very important.
Those who offer a retirement plan said they do it to help employees save for retirement and to empowering employees, according to a LIMRA survey of 1,643 employers and employees.
According to the Bureau of Labor Statistics, only 6 in 10 U.S. workers have access to a defined contribution plan through their employers. Nearly three-fourths of those who have access to a plan participate in it, which ”suggests most employees recognize the value of having an employer-sponsored retirement savings plan,” LIMRA said.
Many employees went beyond saying they realize the importance of having an employer-sponsored retirement plan: they said the availability of a plan and the provision of a matching amount by the employer are what prompted them to start saving.
Thirty-nine percent said the top reason they started saving for retirement was the plan availability and 27 percent said the matching amount from the employer was what tipped the scales for them.
For employers, 80 percent said they offer plans because they feel a strong sense of responsibility to help employees meet their retirement savings goals.
A top financial concern for Americans is saving for comfortable retirement. “The first step [to achieving that goal] is to systematically save throughout one’s career. Research shows access to a workplace savings plan is the most effective way to get people to start to save for retirement. Both employers and employees understand this,” LIMRA said.