NEW YORK, March 29, 2017 /PRNewswire/ -- J.P. Morgan Asset
Management today released a new Retirement Insights paper, "Three
things to know about DC plan participants under 30." The research
reveals defined contribution (DC) preferences among millennials
under 30 to help plan sponsors and advisors put these youthful
employees on a solid path to a financially secure retirement.
Survey results indicate that members of this large and influential
age group - working its way toward retirement for the next 35 to 45
years - are not only supportive of a more "automatic" DC plan, but
that they expect their employers to play a vital role in helping
them save and invest for retirement.
"Our research found that millennials under 30 typically need and
also want guidance from their employers, and prefer a DC plan
structured to simplify investment decisions," said Catherine Peterson, Global Head of Insights
Programs, J.P. Morgan Asset Management. "Getting these young
employees on the right track now, early in their careers, can allow
the benefits of consistent saving and age appropriate asset
allocation to compound over their working lives. The good news is,
those under 30 recognize the challenge they face in saving and
investing for retirement and appear very receptive to the
knowledge, tools and guidance that employers and advisors can
provide." Key findings include:
- A majority identify as "do it for me" investors – The
research shows that, despite their generally accepted reputation as
self-assured and independent, those under 30 are more likely than
those 30 and over to classify themselves as "do it for me"
investors (69% vs. 56%). These younger investors say they want help
selecting their investments and prefer to leave most of the ongoing
investment decisions to experienced professionals (vs. "do it
yourself" investors, who prefer to take a more hands-on approach).
They are also more likely than those over 30 to appreciate
receiving notifications from their employer if they are not saving
enough (62% of those under 30 vs. 34% of those 30 and over).
- In general, they expect their employers to take some
responsibility for helping them save and invest for retirement
– These young employees, less experienced in managing their own
finances – and admittedly a long way from retirement, are more
likely to assign at least some degree of responsibility to their
employers for helping them save for retirement (82% vs. 73% for
those 30 and over). What's more, half of those under 30 think their
employer has an obligation to help them choose the right
investments, compared with only 22% of their older colleagues.
- They are among the strongest proponents of the "automatic
401(k)" – J.P. Morgan's Plan Sponsor research
suggests that some plan sponsors may be reluctant to adopt the
automatic 401(k)—a term we use here to refer to a plan that
utilizes some combination of automatic plan features, qualified
default investment alternatives (QDIAs) such as target date funds
(TDFs), and re-enrollment—for fear of employee pushback. Yet the
participant research indicates an encouraging level of support
among all employees, particularly with participants under 30, for
these plan features, as well as asset allocation strategies, that
may help automate and simplify employee retirement-related
decisions. A large majority of those under 30 are in favor of or at
least neutral toward automatic enrollment (84%) and automatic
contribution escalation (86%), and the group is close to unanimous
in its support of target date funds and re-enrollment.
To learn more about J.P. Morgan Asset Management's leading
defined contribution investment strategies, product innovations,
resources and Retirement Insights program for advisors and plan
sponsors, please click here, or view the full paper "Three
things to know about DC plan participants under 30" by
clicking here.
About J.P. Morgan Asset Management
J.P. Morgan Asset
Management, with assets under management of $1.5 trillion, is a global leader in investment
management. J.P. Morgan Asset Management's clients include
institutions, retail investors and high net worth individuals in
every major market throughout the world. J.P. Morgan Asset
Management offers global investment management in equities, fixed
income, real estate, hedge funds, private equity and liquidity.
JPMorgan Chase & Co. (NYSE: JPM), the parent company of J.P.
Morgan Asset Management, is a leading global asset management firm
with assets of approximately $2.5
trillion and operations worldwide. Information about
JPMorgan Chase & Co. is available at
www.jpmorganchase.com.
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SOURCE J.P. Morgan Asset Management