Although
the total percentage of adults surveyed by the Robert Morris University Polling
Institute who say they are “very” or “somewhat” concerned about their financial
security upon retirement has decreased since February, the percentage saying
they are “very” concerned increased from 37.6% to 42.3%.
Joseph
Angelelli, a gerontologist and RMU assistant professor of health services
administration, said any shift in opinions bears continued scrutiny as a larger
segment of the Baby Boomer generation enters retirement. According to
Angelelli, more than 10,000 Americans retire every day. The average reported
age of retirement by survey participants was 62.27.
More
than half of all respondents (51.9%) indicate they have family or friends to
rely on in retirement—down from 55.5% in February. Approximately 40% say they have
begun saving for retirement but not yet finished, while 15.5% say they have
finished saving for retirement, down from 19.8% in February. More than one-third
(36.9%) say they have not started saving for retirement.
Among
those surveyed that have retired, just 20.2% suggested they had saved enough.
Of this group, 15.3% noted they worked longer than they wanted to before
retiring.
“The
retirement landscape has changed dramatically for this generation. Think of the
uncertainties one must consider: Improvements in health care might dramatically
extend one’s life, the rules of the road for Social Security and for Medicare
are anything but fixed and can be changed at the whim of Congress,” says Bob
Beaves, professor of finance at RMU. “Health care costs increase significantly
year over year and interest rates for the ‘safe’ investment retirees often rely
upon are unpredictable and could remain near all-time lows.”
The poll was
conducted October 10 through 15 and sampled opinions of 1,000 adults. The average
age of respondents was 41.
Last
week, I asked NewsDash readers, “What development are you most anticipating for
2016, and what is your second choice?”
Nearly
six in ten (57.5%) respondents work in a plan sponsor role, 17.5% are advisers
or consultants and one-quarter work in a TPA/recordkeeper/investment manager
role.
Perhaps
not surprisingly, the top trend, product, regulation or legal ruling most anticipated
in 2016 by more responding readers than any other is the final Department of
Labor (DOL) fiduciary (or conflict-of-interest) rule (29%). This was followed
by federal government seeking more revenue from retirement plan savings
(15.8%), regulations about lifetime income illustrations on participant
statements (13.2%) and more defined benefit (DB) plan sponsors transferring
risk to insurance companies (10.5%).
Nearly 8% most anticipate
more guidance about and implementation of annuities in defined contribution
(DC) plans, 5.3% most anticipate final rules about the Internal Revenue Service
(IRS) determination letter program, and 2.6% each most anticipate more guidance
and establishment of state-run retirement plans, more provider consolidation, rollout
of pre-approved plan documents for 403(b) plans, final guidance about cash
balance/pension equity plans and rate of return, more requests from
multiemployer DB plans to reduce benefits, outcome of the Intel lawsuit about
risky investments in custom target-date funds, and more plans moving away from
proprietary target-date funds (TDFs) as the qualified default investment
alternative (QDIA). No one selected environmental, social and governance (ESG)
investing in retirement plans and retirement plan shareholder activism as the
most anticipated development.
For their second choice, more guidance about
and implementation of annuities in defined contribution (DC) plans and federal
government seeking more revenue from retirement plan savings came out on top
with 18.9% of respondents each. The final DOL fiduciary (or conflict-of-interest)
rule was selected as a second most anticipated development by 10.8% of
respondents.
Eight
percent of respondents each selected more guidance and establishment of
state-run retirement plans, regulations about lifetime income illustrations on
participant statements, final guidance about cash balance/pension equity plans
and rate of return, and more plans moving away from proprietary TDFs as the QDIA
as their second choice. More than 5% selected final rules about Internal
Revenue Service (IRS) determination letter program, while 2.7% each chose more
provider consolidation, rollout of pre-approved plan documents for 403(b) plans,
and more DB
plan sponsors transferring risk to insurance companies.
“Other”
responses included the entrance of new providers, such as Betterment, in the DC
space and getting final quarterly report guidance.
Though
verbatim responses were few, there was a great sense of disappointment with the
government’s efforts in the retirement plan industry among them. Editor’s Choice goes to the fortunate reader who said: “What I'm
most excited about for 2016 is - RETIREMENT!”
A big thank you to
all who responded to the survey!
Verbatim
Delayed retirement; need to work longer;
becomes a workforce planning issue
It will be interesting how big the retirement
security topic will get in federal elections.
A sure bet -- you'll always be able to count
on the feds to interfere and screw up all business and industry even more.
Everything they touch breaks, and just like a 2-year-old, they have to touch
everything.
With the recently enacted additional
increases in PBGC premiums, the rush to the door will accelerate.
Many of my plan sponsors have asked for the
lifetime income illustration on statements, but our I/T won't make the change
until it is required. I know there are concerns with consistency of
calculations between providers, so hopefully, the regulations will clarify and
include specific formulas.
In both the health care and retirement plan
arenas, it seems the federal government is doing all it can to push employers
out of the picture without an effective national replacement.
We will probably end up with a new reg that
no one was anticipating, such as the recent transportation bill that extended
5500 due dates!
3rd choice plans moving away from TDF as QDIA
I have nothing!
Continued stupidity from Washington.
What I'm most excited about for 2016 is -
RETIREMENT!
here's hoping 2017 comes here quickly.
Unfortunately politicians - and this Administration in particular - seem to
think that a "legacy" is a terrible thing to waste. And we'll ALL pay
the price for years and years to come.
NOTE: Responses
reflect the opinions of individual readers and not necessarily the stance of
Asset International or its affiliates.