Many Organizations Nationwide Portray a Bleak Retirement Outlook for Employees, Says Aon Consulting
27 Marzo 2006 - 6:00PM
PR Newswire (US)
Study Shows Employers in the Central and Southeast Believe Their
Workers are Least Prepared to Retire CHICAGO, March 27
/PRNewswire-FirstCall/ -- Those looking to retire at a reasonable
age may have to wait a little longer, according to a recently
released study by Aon Consulting, a leading global human capital
consulting firm. (Logo:
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO ) Aon
Consulting surveyed 1,071 U.S. employers and found that 39 percent
believe half or more of their workforce will not have enough
savings to retire between the ages of 62 and 65. Companies in the
Central and Southeast are less optimistic, with 43 percent and 41
percent, respectively, saying the majority of their employees will
not retire at a reasonable age, based on savings habits (see chart
that accompanies this release for national and regional breakouts).
( http://www.newscom.com/cgi-bin/prnh/20060327/CGM006 ) "Employees
face a broad array of retirement plans offered by their employer,
with different availability based on job type and when an employee
was hired," said Chris Bone, executive vice president with Aon
Consulting. "Today more than ever, employees control their
retirement future, a responsibility that can't be taken lightly.
Increasing life expectancies, multiple job changes and greater
diversity of family resources in retirement, make it critical that
workers start saving earlier and take full advantage of
employer-provided retirement resources." In addition, this study
shows that 74 percent of organizations with 401(k), 403(b) and 457
plans say half or more of their employees contribute to these
plans. However, only 19 percent of these companies believe their
workers truly understand how to invest in plan assets. Meanwhile,
63 percent say their workforce has some understanding of defined
contribution investment principles, but 18 percent of employers
believe their workers have little or very little knowledge on the
topic. Despite having many employees facing retirement challenges,
few companies are modifying their retirement plan designs,
according to the Aon Consulting study. In fact, only 20 percent of
companies are actively reviewing their retirement plans, while 80
percent are not considering near-term changes. Moreover, even
though 76 percent of organizations believe retirement education is
important, very important or absolutely critical, just 1 percent
say financial or retirement planning information is communicated to
employees on a regular basis. "While most employees realize they
should save more for retirement, the problem is they don't know how
much more," said Bill Crawford, senior vice president with Aon
Consulting. "Workers are left to interpret well-meaning, but
nonspecific, retirement information, based on their own
circumstances, which is a process that paralyzes many. Companies
need to ensure this information answers the basic questions all
employees ask, such as: How much do I need? How much will I have?
Am I on track? If I am not on track, what can I do to change? Once
equipped with this information, employees are prepared to start a
financial plan." Employer Contributions This study also shows that
85 percent of organizations make contributions to employee 401(k),
403(b) and 457 plans to a certain level. In fact, 29 percent of
companies offer a 100 percent match on employee contributions,
while 7 percent provide a 75 percent match and 39 percent of
employers match 50 percent of employee contributions. The level to
which companies provide a match varies, based on employee
contribution. More than 40 percent of organizations match employee
contributions of 6 percent or more of pay, 16 percent match pay
contributions between 5 percent and 6 percent, and 18 percent of
companies match employee contributions between 4 percent and 5
percent of pay. "Company matches can be significant, representing
tens of thousands of dollars over time, so it's critical that
employees understand their company's retirement plan design and
know what's needed to take full advantage of the matching
contribution," said Bone. Additional Data This study also reveals
the following. -- The most popular retirement plans employers offer
include 401(k) (63 percent), defined benefit (23 percent) and
403(b) (15 percent). -- Nearly 85 percent of organizations have 10
or more investment options in their defined contribution plans. --
More than 85 percent of companies allow for loans through their
defined contribution plans. -- Nearly 90 percent of retirement plan
participants use Web-based retirement planning tools. --
Fifty-eight percent of employers offer retirement plan participants
personalized advisor-based retirement planning tools. About the
Study In January of 2006, Aon Consulting conducted its "National
Employee Benefits Trends Survey" of more than 1,000 U.S. employers
to examine 2006 employee benefit trends and determine what plan
design decisions employers will make in 2007. The survey focused on
health care, retirement, communication and HR outsourcing issues
facing organizations of all sizes and industries. Copies of this
study are available by calling 800-438-6487. For more information,
contact: Joe Micucci, Aon Consulting, 312-381-4786, . About Aon Aon
Corporation (NYSE:AOC) ( http://www.aon.com/ ) is a leading
provider of risk management services, insurance and reinsurance
brokerage, human capital and management consulting, and specialty
insurance underwriting. There are 47,000 employees working in Aon's
500 offices in more than 120 countries. Backed by broad resources,
industry knowledge and technical expertise, Aon professionals help
a wide range of clients develop effective risk management and
workforce productivity solutions. Aon Consulting is among the top
global human resources consulting firms, with 2005 revenues of
$1.255 billion and 7,000 professionals in 120 offices throughout
the world. Aon Consulting delivers integrated consulting solutions
to help clients with employee benefits, human resources
outsourcing, compensation, communication and management consulting.
This press release contains certain statements related to future
results, or states our intentions, beliefs and expectations or
predictions for the future which are forward-looking statements as
that term is defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from either historical or anticipated results
depending on a variety of factors. Potential factors that could
impact results include: general economic conditions in different
countries in which we do business around the world, changes in
global equity and fixed income markets that could affect the return
on invested assets, fluctuations in exchange and interest rates
that could influence revenue and expense, rating agency actions
that could affect our ability to borrow funds, funding of our
various pension plans, changes in the competitive environment, our
ability to implement restructuring initiatives and other
initiatives intended to yield cost savings, our ability to execute
the stock repurchase program, changes in commercial property and
casualty markets and commercial premium rates that could impact
revenues, changes in revenues and earnings due to the elimination
of contingent commissions, other uncertainties surrounding a new
compensation model, the impact of investigations brought by state
attorneys general, state insurance regulators, federal prosecutors,
and federal regulators, the impact of class actions and individual
lawsuits including client class actions, securities class actions,
derivative actions, and ERISA class actions, the cost of resolution
of other contingent liabilities and loss contingencies, and the
difference in ultimate paid claims in our underwriting companies
from actuarial estimates. Further information concerning the
Company and its business, including factors that potentially could
materially affect the Company's financial results, is contained in
the Company's filings with the Securities and Exchange Commission.
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO
http://www.newscom.com/cgi-bin/prnh/20060327/CGM006
http://photoarchive.ap.org/ DATASOURCE: Aon Corporation CONTACT:
Joe Micucci of Aon Consulting, +1-312-381-4786, Web site:
http://www.aon.com/
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