Key employees are optimistic about their retirement savings in 2012, but they aren’t optimistic about the economy, according to new research from the Principal Financial Group.
Most of the employees who were interviewed said they plan to increase or maintain contributions to their employer’s nonqualified deferred compensation plan in the coming year. Of those planning to increase contributions, 78 percent said they believe in the success of their employer. That was an increase of 14 percentage points from the 2010 survey.
The survey, conducted with the Boston Research Group, targeted workers participating in nonqualified deferred compensation retirement plans.
While those surveyed showed optimism in their employers, they did not hold the same view of the economy. In a recent survey of the Principal Financial Well-Being Index, 41 percent of key employees, those who are critical to a business, were significantly more pessimistic than all other employees when it came to the economic outlook for the rest of 2011.
Seventy-two percent of key employees think the economic outlook for 2012 will be the same or worse.
“Volatile financial markets have no doubt created concern about the future of the economy, yet key employees continue to gain confidence in the future of their employer,” said Gary Dorton, vice president of nonqualified benefits for the Principal Financial Group. “Employers recognize their key employees are critical to the success of the business. They want to keep them to protect the future of their business, but also help them save for their own financial future through multiple retirement savings options.”
In the Boston Research Group survey, nine in 10 employers said that helping employees save additional money for retirement is the most important reason they offer a nonqualified deferred compensation plan. Other top reasons included providing a competitive recruiting package and retaining key employees. Nearly three in five employers who sponsor these plans make employer contributions.
“Many people assume nonqualified plans are only for Wall Street when in reality, these are really main street employees who are key to the success of their employer,” Dorton said. Nearly one-third of participants responding to the survey were mid-level managers, which demonstrates nonqualified deferred compensation plans are available to a broad group of employees.