The retirement savings plans of money managers could offer better automatic enrollment and escalation features, said a survey from the Financial Services Roundtable's Save 10 initiative and Pension & Investments.
According to the survey, 90% of 39 firms responding to the question said employees can save 10% of their income, and 91% of 43 respondents said the company contributes to employees' retirement savings accounts. However, only 60% of those 43 respondents contribute to employee accounts even if the employee makes no contribution.
Of 41 respondents, 59% automatically enroll new employees in their plan, while a mere 17% offer auto escalation for new employees.
The executive summary of the survey said both automatic enrollment and automatic escalation “could be higher.”
Only 39% of 46 respondents offer “financial and retirement education opportunities to employees,” according to the survey findings, although the summary notes the relatively low number could be due to money management firms believing their employees already are financially savvy.
A total of 50 money management firms completed the survey in December. Xerox Corp. conducted the survey.
Save 10 is an initiative introduced by the Financial Services Roundtable last May to encourage employers to better help their employees save 10% of their income to prepare for a secure retirement.
Allison Hawkins, vice president of communications at the Financial Services Roundtable, said her organization believes the effort to get employees to save more money for retirement should begin with the employers, “as employers are the conduit for employee savings under the current system.”
“We had hopes that we would learn from this survey the kinds of behavior and activity that companies are engaging in, in getting employees prepared for retirement,” Ms. Hawkins said.
She said the survey shows that the firms not only provide benefits like auto enrollment and auto escalation, but also place value on those benefits.