Workers who are offered defined contribution plans are more confident of retiring comfortably and have a higher level of knowledge about retirement than workers without such plans, according to a new Transamerica Center for Retirement Studies survey.
Sixty-one percent of DC participants surveyed online “developed some form of a retirement savings strategy,” compared with 40% of workers without a DC plan, according to a Transamerica news release.
Also, 78% of workers in a DC plan had an understanding of asset allocation principles, vs. 53% of those who didn’t have a plan; and only 14% of people in a DC plan weren’t sure how their money was invested, compared with 29% of those without a DC plan.
The survey found that 45% of workers offered a DC plan agree they “are building a large enough retirement nest egg,” compared with 27% of people without one. Also, 31% of workers without DC plans expect to rely on Social Security as their primary source of retirement income, compared with 20% of workers in DC plans.
“Our research underscores the importance of a 401(k) plan as one of the most effective tools to educate and help prepare workers about the basics of retirement savings and planning,” Catherine Collinson, president of the Transamerica Center for Retirement Studies, said in the release.
The survey was conducted online between Dec. 3 and Jan. 18 among 3,598 full-time and part-time workers.