60%of millennial respondents and 65% of Gen Xers surveyed said theywould save more in their DC plans if their employer provided alarger match to their contributions. (Photo: Shutterstock)

The latest Natixis survey of workers with access to a definedcontribution retirement plan includes many findings that will behelpful for advisors working with individual clients but crucialfor those working with corporate retirement plans.

The survey of 1,000 employees — including 700 who are planparticipants — found that most employees are severely underfundedin their workplace-based retirement plans and will need to savehundreds of thousands of additional dollars to fund a comfortableretirement.

“Nobody in any generation is saving enough,” says Ed Farrington,the firm's executive vice president and head of retirement andbusiness development.

While that may be impossible for many employees simply becausethey can't afford it, there are multiple ways that their retirementplans can boost contributions, many already known though not alwaysutilized:

• Auto-enrollment: 76% of respondents said they would be moreinclined to save in a company-sponsored DC plan on Day One ofemployment
• Auto-escalation: Only 31% of responding plan participantsparticipate in plans that automatically increase contributions overtime. Gen Xers are most likely to take advantage ofauto-escalation.
• Larger company matches: 60% of millennial respondents and 65%of Gen Xers surveyed said they would save more in their DC plans iftheir employer provided a larger match to their contributions.Seventy-nine percent of plan participants said their employersoffers a matching contribution.
• Financial education: 64% of respondents who participate in acompany-sponsored DC plan said they need more financial educationfrom their employer about their retirement plan.

“Defined contribution plans work if first you have access toit,“ said Farrington. “Then you auto enroll, you auto escalate andyou have a company match. If you have all four it works.” About one-third of private sector employees 22 and olderdon't have access to an employee –sponsored retirement savingsplan, according to Natixis.

Farrington said the two retirement bills introduced in the Houseand Senate can help address this problem because both includeincentives for small businesses to set up a defined contributionretirement plan that has automatic enrollment, and both lift thecap on the maximum for auto-escalation from 10% to 15%, among otherchanges.

Close to 60% of survey respondents said they would contributemore if their company provided a bigger match and just over 60%said they would be more likely to contribute to a plan or increasecurrent contributions if they knew their investments were doing asocial good. (For millennials the percentage was even higher —66%).

“This is where environmental, social and governance funds couldfill an important role,” according to the survey. “Failing to offerthese investments could amount to a significant oversight for plansponsors who are concerned with both participation and contributionrates.”

Millennials accounted for half of the 700 retirement planparticipants that were surveyed by Natixis, and they were moreoptimistic about meeting their retirement goals than Gen Xers andbaby boomers, perhaps because they anticipated needing a smallernest egg than the two older generations: roughly $823,000 vs.$980,000 and for Gen Xers and $1.02 million for baby boomers,according to the survey.

But less than half of all three groups believed they would becomfortable in retirement if they were careful about theirspending, and only about one-fifth of respondents in all three agegroups believed they would have saved enough to lead the life theydesire in retirement.

Two-thirds of respondents who participate in a company DC plansaid Social Security would be their primary source of income inretirement; 42% didn't think it would still exist by the time theyretire.

Despite these rather gray outlooks for retirement savingsoverall, retirement benefits are not a priority for job seekers,according to the survey. Health care benefits are — 65% ofrespondents overall said it was the most important priority forbenefits when seeking a new job, as did 63% of millennialssurveyed. Next came flexible work arrangements, workplace cultureand then retirement benefits, which were rated the most importantbenefit by only 38% of respondents (and 34% for millennials).