The vast majority of executives responsible for 401(k) plans at their companies are feeling less confident that employees are financially prepared for retirement, according to a survey by Deloitte.
The survey found that 84 percent of the 430 respondents said only some or very few employees would be financially prepared for retirement.
The 401(k) plan sponsors in the survey view improving employees' financial planning for retirement as a top goal, similar to last year. This is the 11th Annual 401(k) Benchmarking Survey conducted by Deloitte, in conjunction with the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists.
"From this survey we've learned that for the past several years Americans have not been saving and investing enough for retirement," said Deloitte Consulting LLP principal Stacy Sandler in a statement. "Rising health care costs and dropping 401(k) balances have taken their toll on employees. Those factors, combined with record levels of personal debt, high unemployment and low levels of personal savings continue to paint a highly concerning picture of retirement readiness."
However, the plan sponsors surveyed remain steadfast in their obligation to prepare employees for retirement. Sixty-four percent of the respondents said they believe their responsibility includes taking an interest in whether employees are tracking towards a comfortable retirement.
To encourage plan participants to make better use of their 401(k), 49 percent of the plan sponsors are offering features that automatically increase participants' contribution levels. However, 64 percent of the plan sponsors surveyed reported that fewer than 10 percent of participants take advantage of this opportunity.
Automatic enrollment of employees in 401(k) plans continues to grow, according to the survey, with 56 percent of 401(k) plans include an automatic enrollment feature, up 7 percent from 2010.
Michael Cohn writes for Accounting Today.