Few US, UK workers confident about retirementNews added by Benefits Pro on July 28, 2014

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Joined: September 07, 2011

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By Nick Thornton

Just 31 percent of U.S. defined contribution participants in State Street Global Advisors’ latest transatlantic survey report being confident they’ll be able to support the lifestyle they want in retirement.

That’s certainly a low number, but not as bad as the apparent crisis in confidence facing Irish workers: only 17 percent of surveyed workers on the Emerald Isle are confident about their retirement prospects. Twenty-six percent in the UK say their employer-sponsored plans will provide enough savings.

Nigel Aston, head of DC for State Street in the UK, says the survey suggests workers in DC plans view themselves as savers, not investors.

“Understanding this mindset is critical for providing the right kind of support to encourage increased contributions in workplace DC plans,” said Aston. “We’re seeing consistently high levels of discomfort around market volatility, so it is more important than ever to ensure that pension plans address this concern.”

According to the study, basic investing knowledge remains critically low both in the U.S. and across the Atlantic.

And that likely explains the risk-aversion that’s limiting returns in DC plans.

Only 27 percent of U.S. participants, and 15 and 10 percent of UK and Irish participants, said they would take “somewhat high or high risk” investments in order to achieve better returns.

The majority of respondents from all three countries said they find retirement planning information from websites, advisors and financial publications more useful than the guidance they get from their employers, or their governments.

The report speculates that the overall level of satisfaction with DC plans is relative to the maturity of the DC market in each country, suggesting that as more workers are shifted from DB plans overseas, more will come to be satisfied with their retirement prospects.

In the U.S., where the defined contribution market is significantly more mature, 65 percent of respondents reported some level of satisfaction with their plan, compared to 45 and 31 percent of UK and Irish workers.

But on both continents, the level of satisfaction with sponsors’ levels of involvement were equally tepid: 54 percent of Americans approve of their sponsors’ efforts, compared to 50 percent of UK and 42 percent of Irish workers.

Originally published on BenefitsPro.com
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