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Employers doubt workers' ability to prepare for retirement

Posted by William McBride
William McBride
William McBride set up Warde Graham Consulting in 2003 with a view to offer indi
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on Thursday, 02 February 2012
in Pension Planning and Advice

As the economy continues to falter, employers in the US have become increasingly reticent about their employees' ability to successfully save for retirement, according to a new survey by Aon Hewitt. In response, employers are embracing innovative solutions to help rethink their retirement benefits plan strategies and assist their employees in better preparing for retirement.

Aon Hewitt surveyed more than 500 large U.S. employers, representing over 12 million employees, to determine their current and future retirement benefits strategy. According to the findings, just 4% of employers are very confident that their workers will retire with adequate retirement assets, down substantially from 30% in 2011. Additionally, only 10% of plan sponsors feel very confident that their employees are taking accountability for their own retirement success. Fewer than one-in-five employers (18%) are confident that workers will be able to manage their income during retirement.

While more than half (52%) of employers will focus on encouraging workers to take greater accountability for their retirement savings in the year ahead, they aren't asking employees to do it all on their own. Almost half (44%) of employers will focus on helping workers retire with enough money and most (60%) say that they will place a greater emphasis on helping employees understand and use the employer-provided resources available to them.

Employers also continue to enhance their defined contribution (DC) plan features. As in years past, plans will continue to add automatic features, in addition to expanding savings choices and offering employees more resources to help them meet their needs while in retirement.

Automatic enrollment has been one of the biggest retirement trends in recent years, and will continue to be in the year ahead, albeit with an enhanced focus on outcomes. Currently, 55% of plan sponsors automatically enroll workers in their employer-provided defined contribution plan, up from 24% in 2006.

William McBride set up Warde Graham Consulting in 2003 with a view to offer individuals and corporate clients the very best service and financial advice.



He has advised clients not only in the UK but also overseas since 1992 where he has gained vast knowledge in Pensions and Investments. Most of William’s clients are referred by Solicitors and Accountants where tailored advice is the main priority. William is a keen sportsman with a special interest in Golf.
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