Employers Must Appeal to the Needs of ‘Savers,’ Not ‘Investors’ to Boost Retirement Readiness, Finds State Street Glo...
July 28 2014 - 8:50AM
Business Wire
New Transatlantic DC Survey Reveals that Investment Risk
Appetite and Retirement Confidence Remain Critically Low
A new transatlantic defined contribution (DC) survey from State
Street Global Advisors (SSgA), the investment management business
of State Street Corporation (NYSE:STT), has found that retirement
confidence remains alarmingly low among DC plan participants polled
in the US, UK and Ireland.
SSgA’s most recent survey,* conducted with more than 2,000 plan
participants, gives global insights into the unique needs of
participants in different countries. It also gives single-country
plans actionable information about country specific participant
concerns. The findings indicate that just 31 percent of US
participants, 26 percent of UK participants and 17 percent of
Ireland participants feel confident that they will have enough
saved through their employer sponsored DC plan to afford the
lifestyle they want in retirement.
Nigel Aston, managing director and the head of UK DC at SSgA
commented, “The latest DC survey highlights yet again that DC
members principally view themselves as savers, not investors.
Understanding this mindset is critical for providing the right kind
of support to encourage increased contributions in workplace DC
plans. We’re seeing consistently high levels of discomfort around
market volatility, so it is more important than ever to ensure that
pension plans offer investments that address this concern. Default
strategies that balance risk and return can help increase the
effectiveness of long-term saving efforts.”
The results also highlighted that investment knowledge remains
critically low, with only 22 percent of respondents, on average,
rating themselves as “very or extremely” knowledgeable about
financial matters such as savings and investments. This lack of
financial expertise may explain why investors were unwilling to
take on additional risk to achieve greater returns, as only 27
percent of US participants, 15 percent of UK participants and 10
percent of Ireland participants would take “somewhat high risk or
high risk” investments in order to achieve better returns.
“Many of our multinational clients are interested in aligning
retirement plans across geographies,” said Fredrik Axsater,
managing director and global head of DC at SSgA. “They are looking
for research and ideas to help them build the best possible pension
plans for their global employee network while operating within a
unique regulatory environment specific to their region. SSgA is
positioned to help plan sponsors find a consistent, practical
approach to plan design and participant engagement.”
Across all regions at least one in five plan participants seek
help or advice on their employer-sponsored retirement plans from
websites, advisors, online tools or their employer. The bulk of
respondents across the US, UK and Ireland find retirement planning
information from websites, advisors and financial publications most
useful, ahead of guidance from the government and their
employer.
The research into DC plan participants’ attitudes toward
retirement, retirement planning habits and current level of savings
was conducted in February and March 2014. Respondents were aged 22
to 65, working at least part-time, and participating in their
employer-sponsored DC plan.
For more details on the SSgA transatlantic DC survey, please
click here
About State Street Global Advisors
State Street Global Advisors (SSgA) is a global leader in asset
management. The firm is relied on by sophisticated investors
worldwide for its disciplined investment process, powerful global
investment platform and access to every major asset class,
capitalization range and style. SSgA is the asset management
business of State Street Corporation, one of the world’s leading
providers of financial services to institutional investors.
Important Information
Investing involves risk including the risk of loss of
principal.
The whole or any part of this work may not be reproduced, copied
or transmitted or any of its contents disclosed to third parties
without SSgA's express written consent.
The information provided does not constitute investment advice
as such term is defined under the Markets in Financial Instruments
Directive (2004/39/EC) and it should not be relied on as such. It
should not be considered a solicitation to buy or an offer to sell
any investment. It does not take into account any investor's or
potential investor’s particular investment objectives, strategies,
tax status, risk appetite or investment horizon. If you require
investment advice you should consult your tax and financial or
other professional advisor.
All material has been obtained from sources believed to be
reliable. There is no representation or warranty as to the accuracy
of the information and State Street shall have no liability for
decisions based on such information.
This document is presented in draft format and is subject to
change based on many factors. Once information is agreed upon and
finalized you will be provided a copy for your use. There is no
representation or warranty as to the accuracy of the information
and SSgA shall have no liability for decisions based on such
information.
United States: State Street Global Advisors, One Lincoln Street,
Boston, MA 02111-2900
Ireland: State Street Global Advisors Ireland Limited is
regulated by the Central Bank of Ireland. Incorporated and
registered in Ireland at Two Park Place, Upper Hatch Street, Dublin
2. Registered number 145221. Member of the Irish Association of
Investment Managers.
United Kingdom: State Street Global Advisors Limited. Authorised
and regulated by the Financial Conduct Authority. Registered in
England. Registered No. 2509928. VAT No. 5776591 81. Registered
office: 20 Churchill Place, Canary Wharf, London, E14 5HJ.
Telephone: 020 3395 6000. Facsimile: 020 3395 6350.
Web: www.ssga.com
DCUK-0046Expiration date 31th July 2015
*The SSgA DC Transatlantic Survey was conducted in February and
March 2014. Survey respondents included 1012 participants in the
United States, 1000 in the United Kingdom and 150 in Ireland.
State Street CorporationElizabeth Bartlett, +1
617-662-2903www.statestreet.com@StateStreet
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