State Street Global Advisors Retirement Survey Reveals that Savings Balances & Savings Rates are not the Only Drivers of Plan...
September 17 2015 - 2:00PM
Business Wire
US Participants Report a 30 Percent Increase in Confidence
since 2013
State Street Global Advisors (SSGA), the asset management
business of State Street Corporation (NYSE:STT), today released the
findings of its annual global retirement survey. The survey found
that despite having higher investable assets and considerably
higher contribution rates than Americans, Australians have notably
lower confidence in their ability to meet retirement goals than
their American counterparts. The survey polled more than 3,600
retirement savers across the US, UK, Ireland and Australia.
The survey found that US plan participant confidence is
influenced by a number of factors, including:
- Being knowledgeable about how to plan
and set goals (54%).
- Having retirement planning tools like
savings checklists and online planning tools (45%).
- Understanding how to “invest
appropriately.” However, there was a significant gap between those
who report having invested appropriately (66 %) as a top reason and
those who feel knowledgeable about investing (36%) as a top
reason.
Surprisingly, despite having larger average savings balances
than their US counterparts, Australian respondents were less
confident about meeting retirement goals. While Australian
respondents earned 38 percent less than US respondents, they saved
41 percent more on average. US Participants who aren’t confident
cite having not saved enough (80 percent) and having other
financial priorities (44 percent) as the contributing factors.
“The Australian paradox debunks the widely held belief that
confidence is driven by the balance in a retirement portfolio
savings account,” said Fredrik Axsater, global head of SSGA Defined
Contribution. “Both plan sponsors and participants need to consider
other factors when assessing confidence, such as culture, the state
of the economy, pending legislation, plan design and individual
circumstances. It is important that we move away from a singular
view of confidence to a broader view of the financial life of
people.”
“Additionally, recent market events may have impacted
participants’ short-term confidence levels,” said Nigel Aston, head
of SSGA’s DC business in Europe. “These findings and those recent
events reinforce that participants benefit from consistent
engagement from plan sponsors to help them remain focused on long
term retirement goals.”
The following are best practices US plan sponsors can follow
to help influence confidence among plan participants:
- Setting bolder default contribution
rates: if you don’t use auto-enrollment, make implementing it a
top priority. In addition, consider setting higher default
contribution rates, closer to 10%, for your plan.
- Review your company match:
employer match can play a role in encouraging higher savings. For
example, rather than matching dollar per dollar up to 6%, consider
matching 50 cents on the dollar up to 12%. This signals to
employees that the optimum contribution is 12%.
- Add or expand financial wellness
programs: helping employees with financial basics such as
budgeting may help boost retirement savings rates. In addition,
simply talking about financial topics with their peers can
encourage employees to take action.
This survey was conducted in partnership with TRC Market
Research and Rice Warner. Data were collected in May 2015 through a
12-minute Internet survey using a panel of 3,652 retirement savers,
aged 22 to 81, who were working at least part-time and participated
in retirement savings plans, either with or without the guidance of
a financial advisor.
The SSGA Global Retirement Survey Report can be viewed here.
The SSGA Summer/Fall 2015 Participant magazine can be viewed
here.
About State Street Global Advisors
For nearly four decades, State Street Global Advisors has been
committed to helping our clients, and those who rely on them,
achieve financial security. We partner with many of the world’s
largest, most sophisticated investors and financial intermediaries
to help them reach their goals through a rigorous, research-driven
investment process spanning both indexing and active disciplines.
With trillions* in assets, our scale and global reach offer clients
unrivaled access to markets, geographies and asset classes, and
allow us to deliver thoughtful insights and innovative
solutions.
State Street Global Advisors is the investment management arm of
State Street Corporation.
*Assets under management were $2.4 trillion as of June 30, 2015.
Assets under management include approximately $26.7 billion as of
June 30, 2015), for which State Street Global Markets, LLC, an
affiliate of SSgA, serves as the distribution agent.
CORP - 1583
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State Street CorporationAndrew Hopkins,
+1-617-664-2422Ahopkins2@statestreet.com
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