The difference between employee actions when it comes to defined contribution plans and their employers’ perceptions of those behaviors are vast in some cases, a survey by BlackRock found.
For instance, 34 percent of employees said they contributed at least 10 percent of their wages to their plans, while employers said only 13 percent did so. In addition, 25 percent of employees said they tried to attend every meeting on the plan, while 2 percent of employers said they thought that was the case.
It also appears communications at one or both ends could stand improvement. Employees say they would save more if they knew how much money they would need when they retire. Nearly half (45 percent) said they aren’t saving because they don’t know how much they would need, while three quarters (77 percent) said they would save or increase their plan contributions if they had a clear idea of their retirement needs.
The survey of 1,317 participants in DC plans and 102 plan sponsors also found that employees want automatic savings and management plans. Ninety-one percent liked automatic enrollment and 77 percent said automatic escalation of contributions was appealing.
Finally, 89 percent said they liked having a fund that automatically rebalanced their portfolio as they aged. In another sign of disconnect, 75 percent said their plan does not offer target date funds, compared to 92 percent of employers who said they did so.
Nearly four in five employees (80 percent) that responded to the investment firm’s annual retirement survey said having a retirement plan makes them more loyal to their employer and that improvements make them “believe the company cares about them as individuals.”