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October 06, 2011 at 10:06 AM
Retirement plan participants have moved beyond recovering from the effects of the recession and are focusing on long-term goals, a report from The Principal found.
The report analyzed 2009-2010 data from retirement plans serviced by The Principle.
“We’re seeing participants shift their focus from getting back to where they were to taking steps to get to where they need to be to reach their financial dreams,” said Barrie Christman, vice president of individual investor services at The Principal.
Much of that burden will fall on plan participants rather than employers or plan sponsors. The report cites research from Deloitte Consulting that found just 15% of plan sponsors consider retirement income replacement ratios when they design their plans, even though 62% feel their responsibilities include making sure workers are on the right track for a comfortable retirement.
In spite of that concern, half of employers require one year of employment before workers are eligible to join the retirement plan, well above the 11.2% industry benchmark. Plans that allow new hires to immediately join are becoming less common, falling from 11.8% in 2008 to 10.8% in 2010.
In 2010, almost twice as many participants increased their contributions as those who decreased or stopped them, and while deferral rates were lower in 2010 than their 2008 levels, they had increased since 2009.
