The document summarizes a survey conducted in 2009 on American attitudes toward retirement savings. It finds that while the economic downturn has made some hesitant, most agree that saving for retirement is important. The survey shows that automatic enrollment in 401k plans significantly increases participation rates. Although confidence in having enough savings is low, many feel it is important to continue contributing during difficult markets. The study concludes that automatically enrolling employees in retirement plans benefits both employees and employers.

1. Action and Angst: Employee Sentiments on Retirement Savings in 2009
The recent economic downturn has caused some employees to hesitate about saving for
retirement because of more immediate concerns about job security or the state of their stock
market investments. However, Retirement Made Simpler (RMS), a coalition of organizations
committed to helping Americans save more for retirement, believes that to ensure a secure
retirement for all Americans, it is imperative that employees start saving early, save effectively
and save more. A recent survey also shows that Americans agree that saving for retirement is
more important than ever.
RMS conducted a survey in the summer of 2009 to better understand Americans’ attitudes
towards saving for retirement, and more specifically, the automatic features of their 401(k) plans,
including automatic enrollment and automatic escalation. Some of the findings described below
report a parallel shift in consumers’ attitudes towards financial planning and saving for
retirement. Where possible, the results compare RMS-sponsored data from the 2008 and 2009
surveys.
Employed adults generally view 401(k) plans and automatic enrollment and escalation features in
a positive light. Employees in organizations that offered automatic enrollment were significantly
more likely to participate in their 401(k) than those whose companies did not offer such a
feature. Further, people continue to rely on their 401(k) plans as their primary means of saving
for retirement, however confidence is low that they are saving enough. Significantly, a majority
believe that even if their 401(k) account has lost value in the past year, it is more important than
ever to continue to contribute to it.
Participation in 401(k) Plans Remains Steady
Similar to 2008, over half of all employed adults reported that they participate in 401(k) plans
offered by employers (54 percent in 2008, 56 percent in 2009). However, women, younger and
lower-income employed adults are again less likely than men, older and higher-income employed
adults to say they participate in a 401(k) plan offered by their employers. This provides an
opportunity for your company to reach out to women, younger and lower-income employees and
provide them information and resources about retirement and automatic enrollment.
Automatic Enrollment Feature Leads to Higher 401(k) Participation
When asked about automatic enrollment among individuals whose companies offer a 401(k) plan,
one-third (33 percent) say that their employer offers automatic enrollment. This is a 4 percent
increase over last year.
Importantly, 401(k) plan participation is higher among those whose companies offer automatic
enrollment. Specifically:
- Of employees whose companies offer automatic enrollment, 86 percent say they
participate in a 401(k) plan.
- Conversely, of employees whose companies do not offer automatic enrollment, only
62 percent say they participate in a plan.
These findings are in line with a recent report issued by mutual fund company, Vanguard Group.
The report, “How America Saves 2009,” which analyzed 2008 participant data in the 2,200
defined-contribution plans administered by Vanguard, reports that plans offering the automatic
401(k) feature had an overall participation rate of 84 percent in 2008, compared with just 60
percent for plans without it. The report also found that 20 percent of plans have adopted
automatic enrollment, up from 5 percent in 2005. 1

2. Additionally, the RMS survey found that the majority of employed adults maintain positive
feelings towards automatic enrollment and escalation. Similar to 2008, automatic features
continue to be viewed very positively by those who participate in them. Nearly nine in ten of
those who participate in automatic enrollment or escalation report positive feelings towards such
features (88 percent and 87 percent, respectively). Therefore, if your company is looking to
boost participation in retirement plans and help employees save, you should take a second look
at automatic enrollment (if you don’t already offer them).
Americans continue to believe that it is worthwhile to contribute to their 401(k) even
if it has lost value recently.
Not surprisingly, Americans continue to feel that they are not saving enough for retirement. In
2008, consumers showed little confidence in retirement savings and in 2009, confidence dipped
even lower. In 2009, only one in four adults (24 percent) agreed that they are saving or have
saved enough for retirement. Women are less likely than men to say they feel confident. Similar
to 2008, individuals who participate in a 401(k) plan or are enrolled in automatic features all
share a similar degree of confidence as adults overall.
However, despite a tough economic environment, the majority of Americans still think it’s
important to save for retirement. Over half of all adults (53 percent) believe that even if their
401(k) account has lost value recently, it is as important as ever to continue contributing to it.
More than one-quarter of all adults (28 percent) say they rely on their 401(k) plan as their
primary tool for retirement savings.
Helping employees prepare and thus save for retirement enhances employee loyalty. Nearly half
of employed adults believe they save more for retirement due to their employer offering a 401(k)
plan and therefore feel more loyal to their company because it helps them prepare for the future
(49 percent for both statements).
Bottom Line
In the midst of this economic crisis, aiding your employees by offering an automatic 401(k) plan
will benefit both the company and the employees. Given the positive employee feedback to
automatic features and the continued need for employees to maximize their retirement savings, it
makes sound business sense—and good saving sense—to offer automatic enrollment and
automatic escalation to help employees effectively save for retirement.
Survey Methodology
This mail survey was conducted using Porter Novelli’s proprietary consumer survey,
ConsumerStyles. The survey was sent to 21,420 consumers in April through June 2009, and
includes over-samples of low-income, minority, and households with children. A total of 10,587
adults 18 years of age or older completed and returned the survey. The survey sample is
stratified (or balanced) on region, household income, population density, age, and household size
to mirror the U.S. census.
Retirement Made Simpler is a coalition formed by AARP, the Financial Industry Regulatory
Authority (FINRA), and the Retirement Security Project (RSP). The campaign was created
specifically to inspire and support employers who want to help their employees save more for
retirement. By providing companies with the tools and information they need to automate their
401(k) plans, more Americans will achieve a safe and secure retirement. For more information,
visit www.RetirementMadeSimpler.org.
1
“How America Saves 2009”. A report on Vanguard 2008 Defined Contribution Plan Data.