More U.S. corporations are concerned about their employees' retirement readiness and plan to shift resources to addressing the issue over the next two years, a Willis Towers Watson survey said.
Of the corporate plan executives surveyed in February and March who oversee both defined benefit and defined contribution plans, 39% see retirement readiness as a risk now and 44% see it as a risk two years from now, according to the 2016 Willis Towers Watson U.S. Retirement Plan Governance Survey.
Of those executives surveyed who have never offered a defined benefit plan, 58% indicate retirement readiness is a risk today.
“Not surprisingly, retirement benefit adequacy and the financial fitness of their workers are growing concerns among employers,” said Dave Suchsland, senior retirement consultant at Willis Towers Watson, in a news release.
“This is particularly true among employers that offer only a DC plan. In fact, workers' inability to retire in a timely fashion was identified as the top risk for nearly six in 10 of these plan sponsors. The ongoing shift to DC plans is now prompting employers to prioritize resources that promote retirement readiness,” Mr. Suchsland said.
Of all the plan executives surveyed, 53% say investment volatility is a key concern, while 49% said retirement benefit costs and 47% said regulatory compliance. Executives could choose up to three concerns.
Regarding regulatory concerns, 58% of those with DC plans have conducted a review of operational compliance in the last two years, and 56% of those with DB plans have done so. About a quarter of both respondents said they conducted those reviews due to plan design changes. The larger the employer, the more likely a review would be conducted. Among companies with more than 25,000 employees, 68% of those with DC plans and 64% of those with DB plans have conducted reviews in the past two years.
A total of 284 executives responded to the survey, 99% of whom offer a DC plan and 77% of whom offer a DB plan.