By Elizabeth O'Brien
3... and figuring it out isn’t high on our agenda.
Nearly three-quarters of large employers surveyed this year by Towers Watson say they offer a 401(k) plan to help provide for workers’ income in retirement. But when companies were asked to name the top issues driving plan design, workers’ ability to retire came in fifth, behind the competitiveness of benefits within the industry, benefit plan costs, employee attraction and retention, and legislation and compliance. What gives? “It’s a struggle” for companies to design a competitive plan on a limited budget, Credico says. The burden on employees to provide for their own financial security is huge, and the best advice companies can give is simply to encourage their workers to save, she notes. As an incentive, 91% of the companies surveyed by Towers Watson — each of which had more than 1,000 employees — offered matching contributions. Of those, nearly a quarter offered non-matching contributions, meaning the company would set aside money even if the employee didn’t. Still, we’re not talking big bucks: according to the Plan Sponsor Council of America, a trade group representing employers who offer retirement plans, the average company contribution to 401(k) plans is 2.5% of pay — not nearly enough to provide for the basic costs of living in retirement.