EBRI Reports Americans Experience Retirement System Changes, but Not Responding to those Changes

According to the Employee Benefit Research Institute (EBRI), "a large percentage of American workers recognize the U.S. retirement system is undergoing major changes, but many are not adapting in ways that are likely to leave them well-positioned for a comfortable retirement." EBRI's 17th annual survey or retirement confidence, sponsored with Mathew Greenwald & Associates, finds that finds pension-plan changes by employers have left nearly half of workers less confident about the benefits they will receive from a traditional pension plan, but that many workers are counting on employer-provided benefits in retirement that are increasingly unavailable.

The report--"The Retirement System in Transition: The 2007 Retirement Confidence Survey"(EBRI Issue Brief #304)--finds tht almost half of workers are saving for retirement but that total savings and investments (not including the value of their primary residence or any defined benefit plans) of less than $25,000, and that the majority not putting money aside for retirement have little in savings at all.

“We have known for decades that major changes were taking place in the U.S. retirement system,” said Jack VanDerhei, a Temple University professor, EBRI fellow, and co-author of the 2007 Retirement Confidence Survey. “This year, we found that a substantial number of workers realize that the shift from traditional pensions to 401(k) plans affects them personally. Unfortunately, only 24 percent of those affected indicate that they will save more on their own, and only 8 percent indicate that they will save more in the employer’s plan as a result of these changes. EBRI research suggests that the vast majority of employees are likely to need some type of additional savings if they hope to end up with the same amount of retirement savings they would have expected prior to the change.”

Source: Employee Benefit Research Institute News Release (April 11, 2007)