Prudential study finds workers of all ages would opt for automated features.
Shaken by the most severe financial crisis since the Great Depression, the vast majority of American workers believe it’s time to create a new and improved model for workplace-provided retirement programs, according to a new study by Prudential Retirement.Prudential’s sixth"Workplace Report on Retirement Planning" found that 84 percent of Americans would eagerly embrace a fresh approach to the structure of their workplace retirement plans, especially if those plans were "redefined" to incorporate so-called "auto-pilot" features.
"Our survey found that the losses sustained by American workers during the past two years have resulted in a resounding call to re-evaluate defined contribution programs," said Christine Marcks, president of Prudential Retirement. "Today's workers are keenly aware that the existing 'do-it-yourself' approach isn't the best way to achieve retirement security, and they seem comfortable giving up a level of control if it might lead to better long-term outcomes."
In fact, the survey found that younger and older workers alike overwhelmingly support auto-pilot retirement programs. Approximately 74 percent of respondents said they had a positive impression of automatic enrollment as well as plan features that automatically set contribution rates and periodically increased savings levels.
Automatic asset allocation was viewed as a positive plan feature by 59 percent of younger workers and 57 percent of older workers. And an even greater percentage of respondents—61 percent of younger workers and 59 percent of older workers—expressed a preference for a fully automated plan structure.
Perhaps most surprising, 71 percent of younger workers and 64 percent of older workers said they preferred an in-plan feature that would automatically convert their assets into a guaranteed stream of retirement income, in effect creating a lifetime retirement "paycheck."
"In light of the lessons learned during the recent economic downturn, workers are clearly looking for bold, fresh and innovative approaches And they agree that auto-pilot design—which replaces individual oversight with professional management—represents the best and brightest hope for a more-secure retirement," said Marcks.
The survey polled more than 1,000 Americans ages 21 to 64 who are currently working full-time and are the primary or joint decision-makers on household financial issues.
Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company, Hartford, CT, or its affiliates. Prudential Retirement is a Prudential Financial business.
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