U.S. employers are about to take a more aggressive role with their savings plans to improve the retirement security of their workers, according to survey findings released today by Buck Consultants, an ACS company and one of the world’s leading human resource and benefits consulting firms.
NEW YORK: April 17, 2007 – U.S. employers are about to take a more aggressive role with their savings plans to improve the retirement security of their workers, according to survey findings released today by Buck Consultants, an ACS company and one of the world’s leading human resource and benefits consulting firms.
In its “Defined Contribution Plan Trends Survey,” Buck Consultants analyzed responses from 255 organizations representing a broad spectrum of American businesses.
Employers overwhelmingly feel an obligation to help workers secure meaningful retirement assets, with 82% indicating that providing “retirement income adequacy” was among their highest priorities. Ninety-one percent of survey respondents provide matching contributions, almost all (97%) formally review defined contribution plan investment vehicles on a regular basis, 87% provide for catch-up deferrals, and many offer a diversified investment portfolio in their plans. Sixty-two percent of survey respondents also provide a defined benefit plan.
“Plan sponsors recognize simply providing a savings plan, matching contributions, and diversified investment choices is not enough to avoid a retirement income crisis for millions of Americans,” said Alan Vorchheimer, Principal in Buck’s retirement consulting practice. “Employers that aggressively engage workers to build secure retirements also create a competitive workforce that achieves higher business goals.”
Respondents indicated many plan participants either lack the tools needed to plan for a secure retirement or don’t take advantage of the tools available to them.
As a result, nearly two-thirds of employers will make major changes to their plan design and communications by 2008 to directly engage workers in their personal retirement planning. Seventy percent of survey respondents will enhance their communications regarding plan provisions, 65% will provide additional education on the value of investment diversification and retirement planning, and 70% have or will introduce an auto-enrollment feature to their plan by 2008.
Employers feel the greatest challenges to increasing the effectiveness of savings plans are:
· Employees don’t pay close enough attention to their retirement income needs (80%)
· Low levels of current savings (55%)
· Lack of diversification in employees’ investment choices (42%).
“Respondents to our survey are meeting these challenges by adopting a more ‘activist’ stance to ensure employees have a variety of resources to plan for their own successful retirement,” Vorchheimer said.
Buck’s survey also analyzes the prevalence of automatic enrollment provisions, the impact of the Pension Protection Act of 2006, current payout options, fiduciary issues, plan fees, and Roth plan features.
Buck Consultants, an ACS company, is a leader in human resource and benefits consulting with more than 1,500 professionals worldwide. Founded in 1916 to advise clients in establishing and funding some of the nation’s first public and private retirement programs, Buck is an innovator in the areas of retirement benefits, health and welfare programs, human resource management, compensation, and employee communication. News and other information about Buck Consultants is available at www.buckconsultants.com. Buck is an independent subsidiary of Affiliated Computer Services, Inc.
ACS, a global FORTUNE 500 company with 58,000 people supporting client operations reaching more than 100 countries, provides business process outsourcing and information technology solutions to world-class commercial and government clients. The Company’s Class A common stock trades on the New York Stock Exchange under the symbol “ACS.” ACS makes technology work. Visit ACS on the Internet at www.acs-inc.com.
Buck Consultants’ “Defined Contribution Plan Trends Survey” is available to the media by contacting Ed Gadowski at 201-902-2825. It is available to other interested parties for $250 from Buck’s Global Survey Resources, 500 Plaza Drive, Secaucus, NJ, 07096-1533. Telephone 800-887-0509.
Media Contacts:
Kevin Lightfoot
Vice President Corporate Communications
Affiliated Computer Services, Inc.
214-841-8191
kevin.lightfoot[at]acs-inc.com
Ed Gadowski
Media Relations
Buck Consultants
201-902-2825
edward.gadowski[at]buckconsultants.com
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