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Workplace Retirement Savings and State Plan Mandates: Employer and Employee Perspectives (2017)

Deb Dupont 7/18/2017

LIMRA Life Insurance Research

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Industry Issues

The Department of Labor estimates that 38 percent of private sector workers do not have access to a Defined Contribution (DC) plan. Making worksite savings available to more workers is a critical first step in helping resolve the issue of how workers invest and save for retirement via the workplace. Lack of access is especially pronounced among employees of smaller companies, and can be complicated by questions of full- or part-time working status, or tenure with a given employer.  The Federal government and more than half of the states have turned their attention to the lack of DC programs in so many workplaces, with proposals, studies and legislation various stages to enable workplace savings. 

In 2016, the LIMRA Secure Retirement Institute conducted two surveys – one of workers and another of employers who currently sponsor DC plans. Each initiative included a battery of questions designed to better understand the two stakeholders who are most directly affected by these efforts at the state levels.

Key Findings

  • In theory, many workers support the notion of government-mandated retirement savings, but their confidence in the ability of governmental entities to administer such programs is lower than in any other listed entity.
  • Many employers say that they would be very likely to discontinue their Defined Contribution plan in favor of a government solution, but just as many say that they would not be very likely to do so. 
  • Sponsor fear of plan lawsuits is high correlated to willingness to discontinue a DC plan in favor of a state solution.
  • Sponsors who place higher importance on retirement readiness and participant outcomes are more likely to express the willingness to commit to their DC plan
  • Workers value many aspects of DC plans that will likely not be part of state-mandated solutions
  • Sponsors willing to forego a DC plan for a state solution may not have thought the decision through or made a thorough comparison of their options – an opportunity for plan providers and advisors to add value to their business clients

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Meet the Project Director

Deb Dupont

Deb Dupont is responsible for the Secure Retirement Institute's institutional (retirement plans) retirement research program.  She conducts and supervises research, benchmark reporting and study groups focused on the issues and trends faced by constituents of the defined contribution industry. She also provides guidance and thought leadership in helping LIMRA's member firms better understand the opportunities available for improving delivery of institutional retirement solutions.

Prior to joining LIMRA in 2014 Deb was the Director of ING's Retirement Research Institute (the Institute), where created, managed and published a research platform that included work focusing on multi-cultural, generational, and gender-based analyses of retirement behaviors, and also  published insights and analyses of ING's own cross-Defined Contribution (i.e. across employment sectors) participant base. Deb's work has been recognized for effectiveness and quality by some of the most prestigious awards in the financial services and communications industries, including the Insurance and Financial Communicators' Association and the International Association of Business Communicators. She is a graduate of the University of Connecticut. 

Assistant Vice President, Institutional Retirement Research
Secure Retirement Institute
ddupont@limra.com