For Retirement, Employees Prefer Steady Paycheck over Managing Their Own Investments
April 10 2018 - 9:00AM
Business Wire
Americans prefer companies over government
as their partner of choice
The role a company plays in its employees’ retirement security
has shifted tremendously in recent decades, as employees take on
more responsibility in the planning and saving for their
retirement. Yet many Americans prefer predictability and a
guarantee in their retirement planning – when asked if they would
rather have their employer provide a set retirement paycheck for
life or provide them with money to invest themselves, the steady
paycheck wins by 58% to 42%.
This is one of the latest findings from the Role of the Company
Survey commissioned by MetLife. Americans have accepted the shift
in responsibility for their own retirement security, as 54% say
that individuals are primarily responsible for their own retirement
security, versus 27% who say companies and 19% who say
government.
But employees want a partner in their retirement planning and
they want their company to fulfill that role, as they were six
times more likely to want companies to be more involved – not less
– in providing for their retirement security in the next five to 10
years (61% vs. 9%).
While most individuals will likely have retirement savings
through a combination of individual accounts, employer-sponsored
solutions and Social Security, company-sponsored solutions were
preferred. If given a choice to direct their dollars,
company-sponsored retirement accounts were vastly preferred by
three to one compared to government solutions, as 74% said they
would rather set aside part of their salary in a company-sponsored
retirement account versus 26% who preferred paying into Social
Security. Even when asked to choose between saving on their own or
paying into Social Security, going it alone was preferable by 56%
to 44%.
“Employees recognize the important role their employers can play
in planning for retirement,” said Roberta Rafaloff, vice president
of Institutional Income Annuities at MetLife. “They want a trusted
partner who can help them navigate retirement security, creating an
opportunity for companies to help their employees plan and
save.”
Some interesting generational differences – and similarities –
exist as well. Despite being the generation closest to retirement,
only 14% of Baby Boomers say they want the government to be
primarily responsible for retirement security, while 24% of
Millennials feel that way. There is no significant difference
between Millennials’ and Boomers’ preferences for steady income in
retirement – both groups equally favor a set retirement check from
their employer rather than receiving money from their employer to
invest on their own.
This similarity shows the recognition of the preference for a
guaranteed retirement income, a paycheck in the form of a pension
payment from a traditional defined benefit plan, or an annuity
purchased using retirement savings from a defined contribution
plan, such as a 401(k) plan. The traditional defined benefit plan
is fading from the workplace and a less common offering for younger
workers, while defined contribution plans are more prevalent for
workers today.
Through its Employee Benefit Trends Study (EBTS), now in its
16th year, MetLife tracks employee and employer attitudes and
expectations about the workplace and the workforce. The 2018 EBTS
will be released April 16, 2018. The Role of the Company Survey
looks at the workplace through a different lens, revealing what
employees and society at large expect of corporations broadly.
Research Methodology
MetLife’s survey on The Role of the Company was conducted in
July 2017 and was fielded by ORC International, a leading business
intelligence firm. The survey comprised 1,006 interviews with
part-time and full-time U.S. employees, ages 21 and over. The
margin of error was plus or minus 3.5%.
About MetLife
MetLife, Inc. (NYSE:MET), through its subsidiaries and
affiliates (“MetLife”), is one of the world’s leading financial
services companies, providing insurance, annuities, employee
benefits and asset management to help its individual and
institutional customers navigate their changing world. Founded in
1868, MetLife has operations in more than 40 countries and holds
leading market positions in the United States, Japan, Latin
America, Asia, Europe and the Middle East. For more information,
visit www.metlife.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20180410005963/en/
MetLifeCynthia Millane,
212-578-9474Cynthia.D.Millane@metlife.com
MetLife (NYSE:MET)
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