Participants July 12, 2016

Men Think Differently About Retirement Planning Than Women

Men think about retirement more often than women, talk about it more frequently with work colleagues and believe they are more educated about tools needed to have a secure retirement, a survey finds.
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Results from a OneAmerica survey, the company’s second poll in three years that examines the role gender plays in retirement readiness, found men self-scored themselves as having a significantly higher level of knowledge than women across 10 personal finance and retirement topics, including student loans and taxation on Social Security benefits.

On broad topics such as addressing pre-retirement debt, men and women showed the same propensity to avoid taking loans or hardship withdrawals, at about 71%. When it comes to retirement plan features, men and women both placed the highest priority on a common workplace perk—an employer match on the employee’s contribution to the 401(k) or retirement plan being offered. It was ranked No. 1 by both sexes, followed by having investment options.

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However, women are more likely to place higher importance on the employer match (64% vs. 61% of men), and men are more likely to place importance on investment options (29% vs. 21% of women).

Men think about retirement more frequently than women. Sixty-nine percent report thinking about it at least monthly, compared to 55% of women. Men are also significantly more likely to monitor their retirement plan more frequently. More than half do so monthly (53%), compared to 36% of women. While both men and women indicate that knowing their status against goals is important, men are more likely to say “very important” (54%) than women (48%).

Two substantial differences in planning triggers were revealed by the survey. Men are more likely to discuss retirement with work colleagues (29%) compared to women (22%) and to cite a story in the news or media (16% of men vs. 11% of women) about retirement.

“We’ve known for quite some time that men and women don’t just think about retirement differently, they also talk about it differently,” says Marsha Whitehead, vice president of marketing for retirement services for the companies of OneAmerica. “By understanding these differences, plan sponsors can tailor their education programs to increase the influence they have on male and female participants.”

From August 27, 2015, through January 31, 2016, OneAmerica conducted an online survey of retirement plan participants asking questions about their planning triggers and motivations, education and resource preferences and what roadblocks to retirement they may encounter. Responses were nearly split—5,424 women and 5,331 men.

Additional results of the OneAmerica survey will be released throughout the summer. More information may be downloaded from here.

Data and Research July 12, 2016

Public Pensions Provide Retirement Income and Portability

Research finds that nearly all state retirement systems have features that allow for preservation of retirement income benefits even for employees who change jobs.
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Two concerns Americans have about retirement savings are whether their savings will result in retirement income that will last throughout retirement and whether they will have the ability to move their savings with them if they change jobs. A new report from the National Institute on Retirement Security (NIRS) contends that public pension plans address both these concerns.

Looking at 89 public employee retirement systems, the research found almost all public retirement systems offer defined benefit (DB) pensions that provide a modest, but stable retirement income that lasts through retirement. Eighty percent offer new members a defined benefit (DB) plan only; 11% offer a combination of DB plan and defined contribution (DC) plan; 5% offer new members a cash balance plan; and only 5% offer new members only a DC plan.

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According to the report, “Preserving Retirement Income for Public Sector Employees,” many public pension plans have adopted features that allow individuals who change jobs to retain and even increase their benefits. Employee contributions can follow employees to new employers, often at market or better interest rates. Most plans allow members to later rejoin a system and repay any refunds with interest.

Nearly all public DB systems allow members to purchase additional service credits to increase their pension benefits in retirement. Specifically, all public DB plans allow for the purchase of service credits for prior military service, and more than half of the plans surveyed allow for the purchase of credits for prior out-of-state government service. Some plans allow for the purchase of credits for other specified types of service and leave.

A number of plans have features that increase benefits for short or moderate-term employees. Modifications include increasing the value of the deferred annuity benefits paid to former employees, rewarding employees who choose to keep their member accounts in the plan with interest, and providing even higher matching amounts. These features can encourage workers who leave before retirement to preserve the lifetime retirement income benefits they have earned, rather than spend their refund.

“One pervasive misconception about public DB pensions relates to the benefits when an employee leaves a job before retirement,” says Diane Oakley, NIRS executive director. “Our research finds that most public pensions have adopted retirement plan features that allow employees who change jobs to not only retain benefits, but also to increase retirement benefits.”

The full report is here.

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