Plan Sponsors Hold the Keys to Employee Retirement Readiness
Recent research from Cerilli finds that an employer’s matching contribution is the most influential factor motivating participants to save for retirement. Two-thirds (66%) of 401(k) participants indicate they would be very likely to increase contributions if their employer increased the matching formula. At the same time, only one-third (32%) would be very likely to increase their contributions if they received a personalized statement with financial projections showing inadequate retirement savings.
Participants most frequently indicate they began saving for retirement because their employer offered a matching contribution (46%), they could afford to start saving for retirement (44%), or they were automatically enrolled in their employer’s retirement savings plan (29%).
In addition to employer contributions and auto-enrollment features, participants can benefit from personal retirement planning advice. When planning for retirement, other than valuing their own research, participants are most likely (40%) to view one-on-one sessions with a professional advisor as “very helpful” while videos, articles, and employer communications are typically only seen as “somewhat helpful.”
Through matching contributions, auto-enrollment features, and participant education, employers play a key role influencing participants to save for retirement.