Mercer Survey Reveals 401(k) Participants Who Use In-Plan Advice Have More Positive Retirement Outlooks *But plan sponsors need to focus on engaging more lower-paid employees with these valuable resources Business Wire NORWOOD, Mass. -- March 28, 2013 Employees who say they use advisory services offered to them in their 401(k) plan have a distinctly more positive outlook about their future retirement versus those who do not, according to an analysis of data from the recent Mercer Workplace Survey http://www.mercer.com/2012-mws-summary. Nearly one-fifth (18%) of survey respondents say they engage with an online or in-person advisory service in their 401(k) plan. Although a relatively small percentage of the base, these participants are much more likely to feel that they will have enough money for retirement, can live as well or better than when working and will not have to delay retirement (See Figure 1). Figure 1: Expectations in Retirement: which of these statements below do you expect will be true for you in retirement? Those who engaged All with in- respondents plan advice in the past year I will have enough money to pay 35% 49% for health care I will live as well or better as 29% 40% I did when I was working I will be able to help out younger family members with 15% 26% tuition or housing expenses I will be able to leave money to 23% 33% family members or charities I will be in a position to 16% 24% travel extensively I will run out of money 21% 17% I will have to reduce my 44% 34% standard of living I will consider delaying 44% 34% retirement I will work at least part time 52% 38% in retirement Source: Mercer Workplace Survey This year’s Mercer Workplace Survey also revealed that awareness and availability of in-plan investment advice is high; in fact 79% of participants said that their plan offers some type of advice (online, in-person/telephonic, or both) up from 72% in 2011. “This is great news for plan sponsors who offer advisory services in their 401(k) plan, as there is a clear correlation between positive retirement sentiment and engagement with these services,” said Dave Tolve, Administration Product Leader for Mercer. “Yet, with relatively low usage among participants - especially when you start to look at the demographics - there is still work to be done.” Looking at the demographics of typical in-plan advice users compared to those who do not use these services shows participants who are younger; better-educated; and have higher incomes, balances and deferral rates. “This profile of the typical in-plan advice user should give pause to plan sponsors who want to communicate the high value that investment advice services can provide,” said Suzanne Nolan, Administration Marketing and Communications Leader for Mercer. “These are participants who may in fact need this advice the least, given that they often have longer retirement savings horizons, tend to utilize outside advisors and potentially have both more financial and educational resources at their disposal. The true challenge for a plan sponsor offering in-plan advice is to reach those on the lower end of the income spectrum, where ‘every dollar counts’, and who may also have a shorter timeframe in which to accomplish their retirement savings goals.” About the Mercer Workplace Survey The 2012 Mercer Workplace Survey (www.mercer.com/2012-mws-summary) tracks employee attitudes toward, and experiences with, employer-sponsored retirement, health and benefits programs. The survey represents a national cross-section of active 401(k) participants, defined as those currently contributing to a 401(k) plan irrespective of balance or having a 401(k) balance of $1,000 or more with their current employer whether or not they are currently contributing. Eligible non-participants and those only holding balances at previous employers are not included in this research. Respondents are also required to be enrolled in their employer’s health plan. Online interviews were completed with 1,656 participants between June 6 and June 21, 2012. The survey’s margin of error is plus/minus 2.4%. About Mercer Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in more than 40 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 53,000 employees worldwide and annual revenue exceeding $11 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. For more information, visit www.mercer.com. Follow Mercer on Twitter @MercerInsights. Contact: Mercer Bruce Lee, +1 212-345-0553 email@example.com
Mercer Survey Reveals 401(k) Participants Who Use In-Plan Advice Have More Positive Retirement Outlooks
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