Despite a shift to defined contribution (DC) plans over the last 10 years, retirement plan strategy remains an utmost concern to employers and employees alike. Employers are looking to reduce cost and cost volatility but also understand the impact that any plan changes can have on talent and workforce planning. Employees hit by the recent recession and slow recovery are focused on greater retirement security. And, all this is playing out amid rising health care costs.
The Towers Watson Pensions in Transition: Retirement Plan Changes and Employer Motivations 2012 Report finds that even though DC-only offerings are the most prominent offering to new hires today, many active defined benefit (DB) sponsors remain committed to offering a DB plan in the future. In fact, larger DB plan sponsors are less likely to move away from DB design than their smaller counterparts. And certain industries (e.g., utilities, health care) are more likely to depend on DB benefits as a vital component of reward packages to attract and retain skilled workers.
Key Findings:
-
Plan design changes are being spurred by sponsors that are strongly and uniformly motivated to reduce cost and cost volatility.
-
Not all employers are abandoning DB plans in favor of DC-only offerings, even for new hires.
-
Employers recognize that DC plans generally do not replace as much income as DB plans and are taking steps to help close the savings gap-- but as a combined effort with employees. Fifty-two percent of respondents offer an employer match and 42% offer both a matching and non-matching contribution.
Download the complete report below
|
