2012 PLANSPONSOR Defined Contribution Survey: Nearly 80% of employers believe employees will not achieve retirement goals by age 65 One-third of 401(k) plan participants fail to take full advantage of matching funds from employers
NEW YORK, Nov. 15, 2012 /PRNewswire/ -- Nearly 80% of the more than 6,000 companies that participated in the 2012 PLANSPONSOR Defined Contribution Survey doubt their employees will achieve retirement goals by age 65. The survey results are available now at http://www.plansponsor.com/2012_PS_DC_Survey.aspx.
The survey reveals that the average 401(k) balance is $63,180 (with a median of $50,000). According to Quinn Keeler, senior vice president of research for Asset International, these numbers suggest that "most employees are a long way from a healthy retirement income replacement ratio."
PLANSPONSOR's Defined Contribution Survey also shows that 27.4% of workers eligible for 401(k) plans in 2012 do not participate at all. Of those participating, only about two-thirds take full advantage of matching funds offered by the employers as an incentive for participating. "Employer matches are the closest thing to free money, and it is troubling when even this is not a sufficient incentive to take full advantage of a 401(k) plan," Keeler commented.
A large number of company respondents in the 2012 survey indicate a decline in satisfaction with 401(k) providers. Overall satisfaction is down across 22 of 23 categories of service. Noting that the only area to see an increase in satisfaction is participant fee disclosure, Keeler said, "For 401(k) plans to work well, plan sponsors, the plan's providers and plan participants have to all demonstrate a high degree of commitment."
While overall satisfaction is down, Keeler notes that the Survey helps identify standouts in their Best in Class tables. These offer plan sponsors a means to determine which vendors excel at servicing plans of different sizes, although overall service provider satisfaction is already fairly high as the majority of providers received a B grade or better from their clients.
Now in its 17th year, the 2012 Survey is one of the largest survey samplings of plan sponsors available. This year's edition attracted more than 6,000 retirement plan respondents. Approximately 12.8% of the respondents have between $50 million and $200 million in assets, and 14.4% have more than $200 million.
About Asset International
Asset International is a privately-held provider of information and technology to global pension funds, asset managers, financial advisers, banking service providers, and other financial institutions in the private and public sector. Its industry-leading brands include Strategic Insight, SIMFUND, Plan For Life, PLANSPONSOR, PLANSPONSOR Europe, PLANADVISER, aiCIO, Global Custodian, and The Trade. The company has offices in New York, Boston, Hong Kong, London, Melbourne and Stamford, CT. For additional information please contact Quinn Keeler at email@example.com
SOURCE Asset International