Tuesday, June 02, 2009
Tweet[IWS] Watson Wyatt: OLDER WORK CONFIDENCE in RETIREMENT SECURITY DROPS SHARPLY (Survey) [2 June 2009]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Watson Wyatt
Older Worker Confidence in Retirement Security Drops Sharply, Watson Wyatt Survey Finds [2 June 2009]
Employees With Defined Benefit Plans Feel More Confident Than Those With 401(k) Plans Only
http://www.watsonwyatt.com/news/press.asp?ID=21316
WASHINGTON, D.C., June 2, 2009 Older workers are much less confident about their retirement security than they were two years ago as a result of the financial crisis, according to a new survey by Watson Wyatt, a leading global consulting firm. The survey also found that workers with defined benefit (DB) plans are much more confident in their retirement prospects than those who participate only in a defined contribution (DC) plan.
In its survey, Watson Wyatt found the percent of workers aged 50-64 who are very confident about having enough resources to live comfortably five years into retirement dropped to 44 percent from 63 percent in 2007. The numbers for affording a comfortable lifestyle 15 years into retirement are even bleaker. Only 18 percent think they have sufficient resources to be comfortable for this long, compared with 34 percent who felt that way in 2007. The Watson Wyatt survey, conducted in February 2009, includes responses from more than 2,200 full-time workers.
"Retirement security is a huge concern as individuals have seen significant amounts of their pension and retirement savings decline," said David Speier, senior retirement consultant at Watson Wyatt. "And the financial crisis has been especially damaging to older workers who are worried about potential job losses and have experienced higher stress levels over the past year."
The survey also found that retirement concerns are significantly eased for workers who have a DB plan rather than only a DC plan 55 percent of workers with DB plans are very confident of having enough resources to live comfortably five years into retirement compared with 38 percent of those with only DC plans.
Confidence is higher for individuals with DB plans for longer time horizons as well, although the farther into retirement individuals look, the more confidence falls across the board. When looking at 15 years out, only 26 percent of workers with DB plans remain very confident, nearly double the level of workers with DC-only plans (14 percent). And, 25 years out, the numbers drop even more significantly.
Workers with DB plans are more confident about retirement than those with DC-only plans
[table]
"It's not surprising that DB plans offer workers more confidence, but fewer workers will be covered by them in the years ahead," said Jamie Knopping, senior retirement consultant at Watson Wyatt. "The pendulum is swinging toward 401(k)-only environments right now, but if employers find workers' lack of retirement security creates issues relating to workforce transitions and reduced productivity, it may swing back to a middle ground. Account-based cash balance plans, for instance, offer features of both DB and DC plans, yet do not pose the same level of risk or cost for employers."
Other findings include:
* More active workers said that the financial crisis has resulted in higher stress about retirement security (31 percent) than about job losses (24 percent) and access to affordable health care (15 percent).
* While some workers are increasing their savings (19 percent have increased savings to offset losses due to the financial crisis and another 34 percent are considering doing so), others have borrowed or withdrawn money from retirement savings (9 percent) or are considering doing so in the next 12 months (9 percent).
For more information, visit www.watsonwyatt.com/retirementsecurity.
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Watson Wyatt
Older Worker Confidence in Retirement Security Drops Sharply, Watson Wyatt Survey Finds [2 June 2009]
Employees With Defined Benefit Plans Feel More Confident Than Those With 401(k) Plans Only
http://www.watsonwyatt.com/news/press.asp?ID=21316
WASHINGTON, D.C., June 2, 2009 Older workers are much less confident about their retirement security than they were two years ago as a result of the financial crisis, according to a new survey by Watson Wyatt, a leading global consulting firm. The survey also found that workers with defined benefit (DB) plans are much more confident in their retirement prospects than those who participate only in a defined contribution (DC) plan.
In its survey, Watson Wyatt found the percent of workers aged 50-64 who are very confident about having enough resources to live comfortably five years into retirement dropped to 44 percent from 63 percent in 2007. The numbers for affording a comfortable lifestyle 15 years into retirement are even bleaker. Only 18 percent think they have sufficient resources to be comfortable for this long, compared with 34 percent who felt that way in 2007. The Watson Wyatt survey, conducted in February 2009, includes responses from more than 2,200 full-time workers.
"Retirement security is a huge concern as individuals have seen significant amounts of their pension and retirement savings decline," said David Speier, senior retirement consultant at Watson Wyatt. "And the financial crisis has been especially damaging to older workers who are worried about potential job losses and have experienced higher stress levels over the past year."
The survey also found that retirement concerns are significantly eased for workers who have a DB plan rather than only a DC plan 55 percent of workers with DB plans are very confident of having enough resources to live comfortably five years into retirement compared with 38 percent of those with only DC plans.
Confidence is higher for individuals with DB plans for longer time horizons as well, although the farther into retirement individuals look, the more confidence falls across the board. When looking at 15 years out, only 26 percent of workers with DB plans remain very confident, nearly double the level of workers with DC-only plans (14 percent). And, 25 years out, the numbers drop even more significantly.
Workers with DB plans are more confident about retirement than those with DC-only plans
[table]
"It's not surprising that DB plans offer workers more confidence, but fewer workers will be covered by them in the years ahead," said Jamie Knopping, senior retirement consultant at Watson Wyatt. "The pendulum is swinging toward 401(k)-only environments right now, but if employers find workers' lack of retirement security creates issues relating to workforce transitions and reduced productivity, it may swing back to a middle ground. Account-based cash balance plans, for instance, offer features of both DB and DC plans, yet do not pose the same level of risk or cost for employers."
Other findings include:
* More active workers said that the financial crisis has resulted in higher stress about retirement security (31 percent) than about job losses (24 percent) and access to affordable health care (15 percent).
* While some workers are increasing their savings (19 percent have increased savings to offset losses due to the financial crisis and another 34 percent are considering doing so), others have borrowed or withdrawn money from retirement savings (9 percent) or are considering doing so in the next 12 months (9 percent).
For more information, visit www.watsonwyatt.com/retirementsecurity.
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 3:50 PM
