One year into the COVID-19 pandemic, business leaders remain focused on helping employees manage the impact of recent market volatility on their retirement plans, according to the latest quarterly Principal Retirement Security Survey.
“The latest findings showcase employers’ continued dedication to supporting their employees’ retirement readiness, as well as their overall financial wellness,” said Sri Reddy, senior vice president, retirement and income solutions, at Principal Financial Group. “This is all while managing the challenges of running their businesses during a global pandemic and a market environment they remain cautious about.”
Among the report’s key findings:
Economic outlook remains cautious. The majority of U.S. employers surveyed have remained committed to providing benefits and financial resources throughout the pandemic to help employees manage savings and income in retirement. COVID implications are top of mind for employers, with many reporting concerns about its long-term financial impact.
More than half of employers express caution regarding the economic outlook for the next year. This is a shift from July 2020, when 40 percent of employers expressed caution.
Employers are concerned about how their employees will fare in retirement, as well as talent retention and attraction. They shared the top reasons they continue to offer retirement plans, despite challenges posed by COVID:
Half of employers are concerned that their employees are not planning enough to manage their savings and income in retirement. Just 16 percent of employers feel most of their employees are saving adequately for retirement.
More than half of employers expressed a desire to make retirement income options available to plan participants.
“Effective employee engagement can help workers prepare for retirement,” Reddy said. “In addition to financial wellness education, we actively encourage the adoption of auto features, including plan re-enrollment, as well as retirement income solutions. Connecting workers with the right resources and plan features can help them recognize their options and feel more secure about their path forward.”
When it comes to employees boosting their retirement readiness, employers highlight several opportunities for improvement.
Employers see retirement readiness as an important part of overall financial wellness. Employers report that if they could encourage their employees to take action in 2021 to improve their financial health, they would focus on increasing employee savings rates or deferral percentages within the retirement plan (37 percent) and help employees start saving in the plan offered, if eligible (31 percent).
Complete survey results are available at Principal’s site.