401(k) Investors Want Automatic Savings Increases and More Help in Making Better Retirement Decisions According to New Study

  401(k) Investors Want Automatic Savings Increases and More Help in Making
  Better Retirement Decisions According to New Study from State Street Global

Younger Employees, ‘Generation DC,’ Are Even More Eager for Support

Business Wire

BOSTON -- January 17, 2013

When it comes to saving more for retirement, most employees are eager for more
support and they want their employer to automatically increase their savings
rate, according to the most recent survey of US workplace retirement plan
participants released today by State Street Global Advisors (SSgA), the asset
management business of State Street Corporation (NYSE: STT).

SSgA’s DC Investor Survey, conducted jointly with Boston Research Group,
surveyed over 1,000* employees who participate in 401(k), 403(b), 457 and
profit sharing plans. It focused on the times when employees make some of
their most important decisions about their retirement, which the study’s
authors labeled “Entrances, Exits and In-Between.”

The study confirmed previous SSgA findings about the need for employers to
provide expert guidance and play an active role in helping make saving for
retirement easier:

  *74 percent of employees surveyed want clear examples that will show them
    how their savings will pay off in the future
  *71 percent want employers to increase their savings rate by one percent
    automatically each year; and
  *62 percent of employees 25 and younger said they want their employers to
    show them how to spend less so they can save more, compared to 53 percent
    of all employees surveyed

“Our study leaves no doubt that employees want help in saving more and they
want it to be as easy as possible,” said Fredrik Axsater, managing director
and head of global Defined Contribution for SSgA. “Many of our plan sponsor
clients have expressed some hesitancy about automatically increasing savings
rates for their employees. We hope this survey will help convince employers to
prioritize savings adequacy in 2013.”

Survey respondents indicated that they want advice and guidance from experts
when making decisions about their investments and their overall retirement
readiness at critical inflection points like enrollment, job transition and
exiting their plan at retirement. Axsater highlighted the importance of
providing employees with simple, straight-forward tools that will help them
determine how much to save and how to invest wisely. “This is a perfect
opportunity for employers to provide worksheets, calculators and other
interactive tools to help their employees make good choices and understand the
long-term trade-offs in achieving their retirement goals.” Axsater continued,
“For example, employers can assist employees when they are enrolling in their
plan by highlighting the benefits of target date funds and access to online
interactive planning tools. In addition, employers can support better
decisions made at the time of exit by providing employees with a clear
illustration of their options, including the pros and cons.”

SSgA’s survey calls out an emerging group of younger investors categorized as
“Generation DC.” This group reported an ongoing desire to learn more about
retirement readiness despite the fact that they are more likely to be
automatically enrolled into their DC retirement plan than their older peers;
indicating that automation is not an indicator of inertia when it comes to
saving for their future.

  *82 percent of employees 25 and under stated they are on track to save
    enough to meet their retirement goals, while the average of all employees
    surveyed was only 63 percent;
  *48 percent of employees 25 and under stated that they had increased their
    savings outside of the workplace in the last 12 months, while the average
    of all employees surveyed was only 37 percent; and
  *50 percent of employees 25 and under indicated a company-sponsored buddy
    program that encourages people to help other people save, while the
    average of all employees surveyed was 28 percent.

“The results show that young employees want more engagement, like videos,
interactive tutorials, email reminders, savings challenges and buddy systems.
They also favor expert advice to help them determine how to invest. We
encourage employers to tap their enthusiasm and engagement to help them gear
up for a fiscally sound and comfortable future.” Axsater continued.

Based on all of these insights from investors, SSgA recommends employers help
their employees by aligning their DC plans with the current attitudes towards
savings by:

  *Improving the enrollment experience for all employee demographics, not
    just for Generation DC;
  *Offering transition guidance when employees change jobs, approach
    retirement and enter retirement;
  *Getting to know Generation DC and their distinct attitudes and behaviors
    about retirement preparedness
  *Understanding employees’ expectations regarding the role their employers
    play in helping them save for retirement; and
  *Tailoring communication approaches by age and life stage.

For more information on the survey or to subscribe to “The Participant”
magazine and see the full brochure and more details on the survey, please
visit: www.ssga.com/dc/theparticipant.

As one of the premier investment managers for US defined contribution plans,
SSgA has more than 30 years of experience in the DC market with over $235
billion in global DC assets as of September 30, 2012.

About State Street Global Advisors

State Street Global Advisors (SSgA) is a global leader in asset management.
The firm is relied on by sophisticated investors worldwide for its disciplined
investment process, powerful global investment platform and access to every
major asset class, capitalization range and style. SSgA is the asset
management business of State Street Corporation, one of the world’s leading
providers of financial services to institutional investors.

*The survey was conducted in collaboration with Boston Research Group, a
leader in retirement plan research. The data were collected in October 2012
through a 12-minute Internet survey using a panel of verified 401(k), 403(b),
profit sharing and stock purchase plan participants who were actively
contributing to their plans. The sample of 1,153 net observations has a
maximum sampling error of+/- 2.7 percentage points at a 95% confidence level.
The results were weighted to equalize the results across age groups.



State Street Corporation
Alicia Curran Sweeney, +1 617-664-3001
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