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ING studies the economic outlook of todays government workforce Public Employees In Focus ING digs deep into the retirement and financial mind-set, opinions,

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Presentation on theme: "ING studies the economic outlook of todays government workforce Public Employees In Focus ING digs deep into the retirement and financial mind-set, opinions,"— Presentation transcript:

1 ING studies the economic outlook of todays government workforce Public Employees In Focus ING digs deep into the retirement and financial mind-set, opinions, confidence and habits of todays government workers… who are these previously unstudied stakeholders, what do they think about the world around them, their financial situations, and how do they make decisions? For plan sponsor use only. Not for distribution to the general public. (c) 2010, ING North America Insurance Corporation. C (08/10)

2 Retirement - Insurance - Investments2 Behavioral Finance and retirement research traditionally focuses on large private sector employers, and their 401(k) plans. State and Local Governments employ 8.3 million workers (Bureau of Labor Statistics, 2008) Data desert in understanding the motivations, opinions, personalities, attitudes Potential impact on retirement saving and situations How do they interact with financial products, resources and situations Where do they focus their attention, what do they think is important How confident are they about their own situations New Landmark Study from ING Focuses specifically on State and Local government workers Government Workers Understanding how people think and feel, about themselves, their situations, about money and finances, is key to helping encourage, facilitate and enable productive retirement savings behavior. Public Employees in Focus Report. © 2010 ING North America Insurance Corporation available at ingretirementresearch.com

3 Retirement - Insurance - Investments3 1,026 State and Local Government Employees responded to the survey. Government Employees work for state or local government entities. This group excludes K-12 educators. Employees included in this study are employed full-time and between the ages of 20 and 70. Quotas were set for Government Employees. Invitations were sent to a representative sample of full-time employees age All responders to the survey invitation, regardless of their study qualification status, were weighted to be representative of full-time employees age This resulted in a representative sample of those who actually qualified for the study and completed the interview. The study was conducted 5/27/10 – 6/1/10. Results are reported at +/-3% at the 95% confidence level. Survey conducted for the ING Institute for Retirement Research through Synnovate © ING North America Insurance Corporation Survey Methodology

4 Retirement - Insurance - Investments4 Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What does their retirement picture look like? What are their financial confidence and experience levels? What are financial communication expectations… employer role and preferred method? State and Local Government Employees

5 Retirement - Insurance - Investments5 State and Local Government Employees Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What does their retirement picture look like? What are their financial confidence and experience levels? What are financial communication expectations… employer role and preferred method?

6 AGE n=1, % Mean (years)46.5 GENDER % Male46% HOUSEHOLD INCOME <$50k38% $50k - < 75k27 $75k - < $100k20 $100k - <$200k14 $200k+1 Mean (000s)$71.4 Demographic Profile Q.SA3. What is your age? [Numeric entry] Q.33. What is your gender? [Select one] Q.34. Which of the following ranges best describes your annual household income? [Select one] The Government workforce is slightly more female than male, and the majority are 35 or older. Well over half have a household income less than $75k per year; a significant percentage less than $50k. 6Retirement - Insurance - Investments

7 MARITAL STATUS Married/Domestic Partner56% Widowed/Divorced/Separated24 Never Married20 HOUSEHOLD SIZE Mean2.6 PRESENCE OF CHILDREN IN HOUSEHOLD % Have Children <18 in HH34% UNION MEMBER n=1,026 % Yes32% Demographic Profile (contd) Q.48/Sample data. Which of the following best describes your current marital status? [Select one] Q.45. Which best describes your race / ethnic origin? [Select one] Q.49/Sample data. What is your current household size? [Select one] Q.50/Sample data. Do you have children in your household? [Select all that apply] On average, Government Employees live in 2+ person households, with approximately one-third having children under 18 in their household. More than half are married or have a domestic partner. 7Retirement - Insurance - Investments

8 PENSION ELIGIBLEn=1,026 % Yes71% HAVE EMPLOYER-SPONSORED RETIREMENT PLANn=1,026 % Yes64% CURRENTLY INVESTING IN ESRP (Base = Own ESRP)n=667 Yes74% No16 Not Sure10 ESRP BALANCE (Base = Investing in ESRP)n=496 <$50k50% $50k - < $100k14 $100k+16 Not sure20 Mean (000s)$ ESRP CONTRIBUTION (Base = Investing in ESRP)n=496 Mean (000s)$4.8 Financial Profile – Employer Related Q.35. Will you be eligible for pension retirement income from your employer ? [Select one] Q.SA9. Which of the following financial products do you currently own? [Select one] Q.40. Are you currently investing in your employers defined contribution retirement plan? [Select one] Q.41. What is the approximate balance within your employers defined contribution retirement plan [Select one] Q.42.Approximately how much did you contribute to your employers defined contribution retirement plan in 2009? [Select one] Most Government Employees state that they are pension-eligible. The majority also have an Employer-Sponsored Retirement Plan (ESRP). 8Retirement - Insurance - Investments

9 FINANCALPRODUCT OWNERSHIPn=1,026 Own retail or ESRP investments81% Own employer-sponsored retirement plan64 Own retail investments51 Own checking/savings account89 HAVE FORMAL, WRITTEN FINANCIAL PLAN Yes13% No – but plan to create one53 No – and I do not plan to create one34 TOTAL HOUSEHOLD INVESTABLE ASSETS <$10k27% $10k - < $50k26 $50k - < $100k15 $100k - <$250k18 $250k+15 Mean (000s)$140.4 Financial Profile – General Q.SA9. Which of the following financial products do you currently own? [Select one] Q.13. Do you currently have a formal, written financial plan for managing your income and expenses during retirement? [Select one] Q.46. What would you estimate to be the total amount of your households investable assets? Please include money in checking, savings, employer sponsored retirement plans (such as 401(k), 403(b), 457) and investments (such as mutual funds, individual stocks and bonds, annuities, CDs, IRAs, etc.). [Select one] Most do own retail or Employer Sponsored Retirement Savings Plan (ERSP) investments. Few have a formal, written financial plan – but more than half plan to create one. Just over half have investable assets of less than $50k. 9Retirement - Insurance - Investments

10 TOTAL HOUSEHOLD RETIREMENT SAVINGS (Base = Own ESRP) n=667 Nothing7% <$10k25 $10k - < $50k30 $50k - < $100k13 $100k - < $250k15 $250k+10 Mean (000s)$106.9 PROPORTION OF HOUSEHOLD RETIREMENT SAVINGS IN ESRP (Base = Currently investing in ESRP) n=496 Proportion in ESRP67% Financial Profile – General (contd) Q.47. What would you estimate to be the total amount that your household has saved for retirement? Please include retirement savings including employer retirement savings plans (401(k), 403(b), 457), IRAs, annuities, and any other investments that you intend to use for retirement. [Select one] The ERSP makes up approximately two-thirds of total household savings for those who do have investments. 10Retirement - Insurance - Investments

11 11 State and Local Government Employees Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What does their retirement picture look like? What are their financial confidence and experience levels? What are financial communication expectations… employer role and preferred method?

12 Risk Taker Personality Most Government employees would not classify themselves as risk takers in their personal lives. Correspondingly, relater is the most commonly self-assessed personality type. Q.31. Would you [Select one you are a risk taker in your personal life? [Select one] Q.32. Which personality type would you say best describes you? Risk Taker Relater: Good team player, prefer stability to risk, cares greatly about the feelings and needs of others, likeable, not a risk- taker Thinker: Self-controlled and considerate, prefer analysis to emotion Socializer: Outgoing, optimistic, enthusiastic, like to be in the center of things, loves to talk Director: Firm, forceful, confident, competitive, decisive, determined, risk-taker Relater Thinker Socializer Director 12Retirement - Insurance - Investments

13 Risk Personality It follows that very few consider themselves aggressive investors; fully half consider themselves conservative. Aggressive – Willing to accept a high level of risk to possibly achieve high asset growth Moderate – Willing to accept a moderate level of risk to possibly have moderate investment growth Conservative – Want to protect savings and avoid any possible losses Q.XX. Which of the following best describes your retirement investment philosophy? 13Retirement - Insurance - Investments

14 14 State and Local Government Employees Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What does their retirement picture look like? What are their financial confidence and experience levels? What are financial communication expectations… employer role and preferred method?

15 Retirement - Insurance - Investments15 Top 5 Issues Facing America Today Government employees feel that employment and healthcare costs are the top issues facing America today. Retirement security is the next most important issue. #2 ranking #1 ranking Cost of health- care Retire- ment security Employ- ment / unemploy- ment Education budgets State/ municipal budgets Financial literacy Global warming Child- hood obesity Crime rates Cost of higher education Future of Amer- ican bus- inesses Military efforts in Iraq and Afghan- istan Controlling drugs / the war on drugs Poverty 100%99% 98% 99%87%96%97%94%95% % Think is an issue at all Q.1 In your opinion, what are the top five issues that America is facing today? [Rank top 5] Q.2 How optimistic or pessimistic are you that America will be able to address these issues effectively within the next 3 to 5 years? [Select one] Think a #1 or #2Issue 15Retirement - Insurance - Investments

16 Americas Ability to Address Issues Effectively in Next 3 – 5 Years* These employees are generally not very optimistic about Americas ability to address most issues effectively within the next three to five years. Retirement security is one of the issues with the greatest pessimism. Cost of health- care Retire- ment security Employ- ment / unemploy- ment Education budgets State/ municipal budgets Financial literacy Global warming Child- hood obesity Crime rates Cost of higher education Future of Amer- ican bus- inesses Military efforts in Iraq and Afghan- istan Controlling drugs / the war on drugs Poverty 36%6%1%5%19%3%5%3%5%8%2%1%3% % Ranking issue #1 Pessimistic Somewhat Optimistic Very Optimistic Q.1 In your opinion, what are the top five issues that America is facing today? [Rank top 5] Q.2 How optimistic or pessimistic are you that America will be able to address these issues effectively within the next 3 to 5 years? [Select one] *Base: Respondents who consider it an issue Optimistic 16Retirement - Insurance - Investments

17 Financial Literacy as Part of School System Although very few employees rank financial literacy in the top two issues facing America today, virtually all believe that financial literacy should be a part of education in the school system. More than half feel that it should be an important part. Q.1 In your opinion, what are the top five issues that America is facing today? [Rank top 5] Q.3 Please read the following statements and select the one that best describes your feelings. [Select one] Should be an important part of education taught to children in the school system Should be a part of education taught to children in the school system, but does not need to be a priority Does not need to be included in education taught to children in the school system 95% 3% rank financial literacy in the top 2 issues facing America today 17Retirement - Insurance - Investments

18 18 State and Local Government Employees Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What does their retirement picture look like? What are their financial confidence and experience levels? What are financial communication expectations… employer role and preferred method?

19 Trust of Others Government employees trust of banks/financial services companies is quite low – higher than only their trust in car salespeople! They have more trust in their immediate supervisors than in their employers as entities / organizations. Q.4 In matters that are relevant to your relationship, how much do you trust…?[Select one] Q.5 In general, how much do you trust… ?[Select one] Spouse/ partner Friends /co- workers ChildrenParentsPeople who help you at car dealer- ships Primary doctor Insurance agent Banks / Financial services companies Hairdresser / barber / stylist DentistFinancial advisor Immediate supervisor Employer Trust In General (Top 2 Box)* Trust in Matters Relevant to Relationship (Top 2 Box)* *Base: Have a Relationship Trust in general correlates closely with trust in relevant matters 19Retirement - Insurance - Investments

20 20 State and Local Government Employees Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What does their retirement picture look like? What are their financial confidence and experience levels? What are financial communication expectations… employer role and preferred method?

21 Amount Spent on Single Biggest Purchase in Past 12 Months Slightly more than half have spent more than $1,000 on a single purchase in the past 12 months… but one-third (32%) are more frugal. Q.25 How much did you spend on it? [Select one] $1000+ (net): 53% 21Retirement - Insurance - Investments

22 Single Biggest Purchase in Past 12 Months Q.24. What was your biggest single purchase in the past 12 months? [Open End] <$250 Clothes dryer Device to back up my computer A mix master to make holiday cookie baking easier $250 - $499 Massage package An airline ticket from Yuma to MN $500 - $999 Flat screen TV Tires Central Air conditioner $1,000 - $4,999 Dental implant! Washer and dryer Home improvement materials $5,000 - $9,999 Home repairs New (used) car $10,000 - $24,999 New car Vacation $25,000 or more Swimming Pool $35,000 Certificate of Deposit New home Single biggest recent purchases made by employees range from the practical (tires, dental work) to the non-essential (swimming pool, massages, vacation). 22Retirement - Insurance - Investments

23 Resources Used to Make Appliance/Vehicle Purchase Decision More depend on their friends/family/colleagues and spouses/partners than on other resources when making appliance/vehicle purchase decisions. Sales professionals fall into the second tier of resources. Q.26. Which, if any, of the following resources have you used when making a purchase decision on the following areas? – Appliances or Vehicles [Select one] 79% use at least one of these resources Sales professionals Spouse/Partner Friends/Family/ Colleagues TV/Radio/Public Personalities Websites/Financial Websites Social Networks/ Online communities Employer Educational / reference materials Technical materials Advertising Seminars Other Resource First Tier Second Tier 23Retirement - Insurance - Investments

24 Importance of Resources Used to Make Appliance/Vehicle Purchase Decision* Spouses/partners are considered to be a very important resource by most for appliance/vehicle purchase decisions. Sales professionals are important for many of these, but not to the extent of several other resources. Q.27. How important are each of the following resources when making purchases such as appliances or vehicles? [Select one] Govt Employees Non-K-12 Educators *Base: Use resource for appliance/vehicle purchase decision Sales prof. Spouse/ Partner Friends/ Family/ Colleagues TV/Radio/ Public Pers. Social Net/ Online Comm. EmployerTech materials Adv.Ed / ref materials WebsitesSeminarsOther resource Somewhat ImportantVery Important 24Retirement - Insurance - Investments

25 Resources Used to Make Financial Product Purchase Decision With financial product purchase decisions, in addition to utilizing friends/family/colleagues or their spouse/partner, financial advisors are also top resources… and these employees have also used their employer as a resource more frequently… but fewer report using any resource in financial product decisions. Q.26. Which, if any, of the following resources have you used when making a purchase decision on the following areas? – Financial Products [Select one] Financial advisor Spouse/Partner Friends/Family/ Colleagues TV/Radio/Public Personalities Websites/Financial Websites Social Networks/ Online communities Employer Educational / reference materials Technical materials Advertising Seminars Other Resource 68% use at least one of these resources… fewer resources used in making financial decisions than other major purchase decisions! Employers more frequently used when making financial decisions than other purchase decisions (20% vs. 6%) 25Retirement - Insurance - Investments

26 Importance of Resources Used to Make Financial Product Purchase Decision* Q.28. How important are each of the following resources when purchasing financial products? [Select one] Somewhat ImportantVery Important *Base: Use resource for financial product decision Financial Advisor Spouse/ Partner Friends/ Family/ Colleagues TV/Radio/ Public Pers. Social Net/ Online Comm. EmployerTech materials Adv.Ed / ref materials WebsitesSeminarsOther resource Spouses/partners are considered to be a very important resource by most for financial product purchase decisions, followed by financial advisors. Employers are important for many, but not to the extent of several other resources. 26Retirement - Insurance - Investments

27 Contributor to Financial/Investment Product Purchase Consideration* People who invest – own financial products -- state that fees/costs, company reputation, and performance are the strongest contributors to their financial purchase decisions. Q.22. When choosing a financial or investment product, to what extent do each of the following contribute to your consideration of purchasing the product? [Select one] Rec. from financial professionals Rec. from other sources Company rep./trust- worthiness Prior exp. with company Investment options Investment perf/interest rates Fees/ costs Company advertising Other Plays Somewhat of a rolePlays very strong role *Base: Own retail investments, ESRP, and/or checking/savings account 27Retirement - Insurance - Investments

28 Attention Paid to Financial Documents Q.23. When youre deciding to purchase a financial product, what level of attention do you pay to the following documents or information from the offering company, if they are available to you? [Select one] Prospectus and legal documents Descriptions of the products/ funds Marketing materials Summary of risks and limitations Summary of features and benefits Educational materials, supplementary materials Web site descriptions *Base: Own retail investments, ESRP, and/or checking/savings account and Available to you I read it all I read most of it I skim it I dont read it % Read at least some of it: % Do not read it: Of the documents/information included in this research, marketing materials are the least read, followed by prospectuses/legal documents and web descriptions. Less than one-third read all of any sort of financial document. They are more likely to read more of summaries than details. 28Retirement - Insurance - Investments

29 29 Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What does their retirement picture look like? What are their financial confidence and experience levels? What are financial communication expectations… employer role and preferred method? State and Local Government Employees

30 How Often do you… Government employees more frequently participate in other life habits than they do in activities related to their retirement-related financial needs. Mean times per year (including Never – 0) Have a routine dental checkup Go to a gym or exercise Read your (paper) mail Plan and write down your grocery list Read your Get a physical Go out to dinner or to a movie Take a day trip Take a vacation Take your car in for servicing 99%97%66%88%96%91%94% 91% % Do Activity Q.30. How often do you… ? [Select one] Figure out how much you need to retire on Look at your budget Check your bank account * Check your retirement account ** Change how you invest your retirement account** Examine your life insurance needs FINANCIAL HABITS OTHER LIFE HABITS 98%88%93%69%72%73% *Base: Have checking/savings account **Base: Have ESRP, annuities, and/or IRA % Do Activity 30Retirement - Insurance - Investments

31 31 Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What are their financial confidence and experience levels? What does their retirement picture look like? What are financial communication expectations… employer role and preferred method? State and Local Government Employees

32 Comfort Level in Financial Ability Q.14. How comfortable are you in your financial ability today to…? [Select one] Uncomfortable Somewhat comfortable Very comfortable Feed yourself /your family Pay your regular monthly bills Pay for basic healthcare Pay for moderate extras Put a little something away for retirement Make a basic household appliance purchase Pay for more substantial extras Make an electronics household appliance purchase Take a vacation this year Deal with an unexpected financial emergency Save what you think is enough for retirement Most feel they can cover the day-to-day basic expenses, but discomfort increases in other areas – in particular, with covering an unexpected financial emergency and saving for retirement. 85% 79% 68% 32Retirement - Insurance - Investments Feel comfortable

33 Financial Confidence Change Compared to Before Market Decline Many have had their confidence shaken in their current financial ability to cover many areas of savings and expenses – particularly an unexpected financial emergency and saving enough for retirement. Q.14. How comfortable are you in your financial ability today to…? [Select one] Q.15. Compared to before the financial market decline that began in 2008, has your confidence level changed in your financial ability to…? [Select one] No change – about same Yes, less confident today Yes, more confident today Comfortable in Financial Ability Today (Top 2 Box) 39%44%56%52%49%52%53%68%69%79%85% Feed yourself /your family Put a little something away for retirement Save what you think is enough for retirement Take a vacation this year Pay your regular monthly bills Make a basic household appliance purchase Make an electronics household appliance purchase Deal with an unexpected financial emergency Pay for basic healthcare Pay for moderate extras Pay for more substantial extras 33Retirement - Insurance - Investments

34 Generational Financial Comparison One-third of employees in these sectors consider their present financial situation to be on par with that of their parents at a similar age. Nearly half think it is better. Q.17. When you compare your own overall financial situation today to what you think your parents was at a similar age, what is your impression? [Select one] Im better off About the same Im in worse shape 76% 34Retirement - Insurance - Investments

35 35 Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What does their retirement picture look like? What are their financial confidence and experience levels? What are financial communication expectations… employer role and preferred method? State and Local Government Employees

36 Amount of Thought Given to Retirement Income Most have given at least some thought to how they will get income during retirement; two-fifths say they have thought about it a lot. Q.6. How much thought have you given to how you will actually get income during retirement? [Select one] A lot Some A little None 96% They think about retirement, yet… 36Retirement - Insurance - Investments

37 Last Time Calculated Amount Needed to Retire Despite this, almost one-third have never calculated how much they may need to retire. Q.7. When was the last time you and/or your spouse/life partner calculated how much you will need to retire? [Select one] Mean = 2.4 years ago and excludes Never/Dont Know Unsure, never or 10+ years 37Retirement - Insurance - Investments

38 Expected Retirement Age This uncertainty extends to planned retirement age… One-quarter do not know when they will retire. Q.8. At what age do you expect to retire? [Select one] Mean = 63.4 years 38Retirement - Insurance - Investments

39 Changes as a Result of Financial Market Decline Nearly three-quarters say they did not change the amount they invest for retirement as a result of the financial market decline. Perhaps to compensate, however, for various reasons, two-fifths say they now expect to retire at an older age. Q.9. Has your expected retirement age changed compared to before the financial market decline that began in September of 2008? [Select one] Q.10. Which of the following, if any, contributed to the change in your planned retirement age? [Select one] Q.11. Have you changed the amount you invest for retirement as a result of the financial market decline that began in 2008? [Select one] Expected Retirement Age Changed Contributor to Increased Expected Retirement Age* *Base: Expected Retirement Age Increased Yes – gone up Yes – gone down No change Retirement Investment Amount Changed 39Retirement - Insurance - Investments

40 Comfort with Current Financial Ability – Retirement Related Needs One-third of government employees are uncomfortable with their current financial ability to save enough for retirement. The financial market decline has caused roughly four-in-ten to be more uncomfortable with their ability to save for retirement. Q.14. How comfortable are you in your financial ability today to…? [Select one] Q.15. Compared to before the financial market decline that began in 2008, has your confidence level changed in your financial ability to… [Select one] Govt Employees Non-K-12 Educators Put a little something away for retirement Save what you think is enough for retirement Comfort Level in Financial Ability Today to…. Uncomfortable Compared to Before Market Decline, has Confidence Level Changed in Financial Ability to…. Somewhat comfortable Very comfortable Yes – more confident Yes – less confident No change Put a little something away for retirement Save what you think is enough for retirement 40

41 Employer Pension Nearly three-quarters of Government employees say they are eligible to receive a pension, but strikingly, over one-third of those eligible are willing to admit that they lack knowledge of how the benefit will be calculated. Q.35. Will you be eligible for pension retirement income from your employer? [Select one] Q.36. How confident are you that your pension plan and your income from it will remain unchanged throughout retirement? [Select one] Q.37. Do you know how your pension plan benefit will be calculated? [Select one] Q.38. What percentage of your households retirement income do you expect to come from your pension plan? [Select one] 71% say they are eligible for pension Retirement Income Yes No Know Pension Benefit Calculation* Percent of Household Retirement Income Expected from Pension* Mean = 54.7% 41Retirement - Insurance - Investments

42 Expectations and Confidence: Social Security and Pension Income Only half are confident that their pension income will remain steady. The majority expect that Social Security will be a source of retirement income. Q.39. Do you expect to receive retirement income from Social Security? [Select one] Confidence that Pension Plan Income Will Remain Unchanged Throughout Retirement* *Base: Eligible for Pension Retirement Income 51% 49% Expect Social Security Income 42Retirement - Insurance - Investments

43 Investing in ESRP The majority of ESRP owners are currently investing in their plans, but over half of those currently investing would like to be contributing more than they are presently. Q.40. Are you currently investing in your employers defined contribution retirement plan? [Select one] Q.43. Please read the following statements and select the one that best describes your feelings about the amount you currently contribute to your defined contribution retirement plan. [Select one] Currently Investing in ESRP* Feeling About Current ESRP Contribution Level** *Base: Own ESRP **Base: Currently investing in ESRP 43Retirement - Insurance - Investments

44 Why Not Investing in Employer-Sponsored Retirement Plan* Some are not participating in an employer-sponsored retirement plan for technical reasons, such as employer not offering it or ineligibility. Others offer a varietyof reasons for why they are not participating – including lack of knowledge about the plan/investments, preference for other types of investments, and lack of money. Q.44. You indicated that you are not currently participating in your employers defined contribution retirement plan. Why not? [OPEN END] It's not available to me yet Not offered I do not like the fees and fund choices. Funds are used for daily living costs Know I should - but can barely pay today's bills Prefer to do this on my own. Have personal plans Employer never stressed it I feel it is too risky, does not perform as indicated. I just don't trust someone else messing with my money. Don't know how it works CD's are better investment Right now debt reduction is my biggest concern I do not know what it is. I am new to my current employer. Have participated in the past for years. No matching funds Didn't know that we had it until recently. *Base: Do not own ESRP or own but are not currently investing Comments have not been coded to quantify, but rough estimates are that one-third of those who own an ESRP but are not currently investing say it is because they prefer to invest elsewhere or already have other investments; roughly 20% say they cannot afford to contribute; 10% say they are not sure what the plan is or what it entails. 44Retirement - Insurance - Investments

45 45 Who are these employees? What is their personality? What do they think about Americas issues? Who do they trust? What do they buy and how do they make purchase decisions? How do their financial habits compare to other habits? What does their retirement picture look like? What are their financial confidence and experience levels? What are financial communication expectations… employer role and preferred method? State and Local Government Employees

46 Employer Involvement in Financial Education Few look to their employer for financial education. Among the one-quarter who do, they would primarily like more retirement savings ideas. Q.18. Please read the following statements and select the one that best describes your feelings. [Select one] Q.19. What type of additional financial education would you like to be receiving through your employer? [Select one] Q.20. How would you like to receive additional financial education? [Select one] Fund performance info Investment options info Investment strategies info Ideas for saving for retirement Ideas for saving, in general Other Employer Role in Providing Financial Education Additional Financial Education Wanted Through Employer* *Base: Want employer to make more financial education available Seminars / meetings Printed materials OnlineOther Method Wanted for Receiving Additional Financial Education Through Employer* 46

47 Preferred Method of Receiving Investment Information* Two-fifths who own retail and/or employer-sponsored retirement plans prefer to receive investment information in the mail – while just over half prefer an on-line method. Very few would like it to come via phone. Q.21. What is your most preferred method of receiving information about your investments? [Select one] *Base: Own retail investments and/or ESRP 47Retirement - Insurance - Investments 51% prefer an electronic method

48 Retirement - Insurance - Investments48 Questions / Comments Visit Ingretirementresearch.com for the Study Report, other articles and research updates, and special reports and tools for your employees


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