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WINDSOR, Conn., Dec. 14, 2010 — The existence of an employer matching contribution is the single most significant factor in determining whether employees contribute to a DC plan or not. In fact, controlling for other factors, the presence of an employer match nearly triples the odds of employees contributing to their DC plan, according to a new LIMRA study.

“Our research found that not-for-profit and for-profit employees have similar employer savings profiles within their employer plans,” said Cecilia Shiner, analyst, LIMRA Retirement Research. “Age, household income and education had a fraction of the impact of an employer match for both not-for-profit and for-profit employees when it came to participating in DC plans.”

“While most employees we surveyed only contribute amounts equal to or less than their employer’s match, LIMRA found that for-profit employees are the most likely to contribute amounts greater than the amount necessary to receive the maximum employer match,” said Shiner.

Sixty-seven percent of employees who have a DC plan available to them participate in the plan; on average they contribute eight percent of their salaries. Employees who do not contribute to their DC plans say they cannot afford to do so; but 36 percent of those intend to start or resume contributing within the next 12 months.

Employees recognize the importance of saving for retirement. Besides emergencies and unemployment, employees cite retirement as the most important reason for saving. Yet 59 percent of employees believe they have not planned enough for retirement, and over 60 percent have less than $100,000 in household retirement savings.

LIMRA research found that women are especially ill-equipped for retirement. Although their participation rates are equal to those of men, their DC plan balances are significantly smaller. Half of women have $15,000 or less saved in their DC plan.

Female workers must confront the challenge of saving for extended average longevity, despite work disruptions for caregiving, as well as lower average salaries. Regardless of employer type, women are more likely to earn less than their spouse or partner.

The study examined almost 2,500 employees, who did not work for the federal government or military, were not self-employed, and were eligible to participate in a DC plan.


LIMRA is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at

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