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July 2009

SHRM Poll – The U.S. Recession and Its Impact on Employee Retirement

©SHRM 2009 SHRM Poll July 6, 2009 2

Other

Suspend investments in mutual funds that are determined to be particularly risky

Offer additional investment options for employees (i.e., other than 401(k), pension plan, etc.)

Change investment management companies (e.g., for organization's 401(k), pension plan, etc.)

Implement/revise investment policies for company 401(k), pension assets, etc.

Offer educational literature, presentations, etc. for employees specific to investing/retirement planning in the climate of current financial challenges

0% 20% 40% 60% 80% 100%

6%

6%

7%

11%

21%

83%

9%

8%

10%

13%

20%

72%

2009 (n = 495) 2008 (n = 205)

What, if any, action related to employee investments/retirement planning is your organization MOST LIKELY to take in the coming months in light of the current financial challenges to the U.S. economy?

Note: Respondents who answered “Not applicable” were excluded from this analysis. Percentage s do not total 100% as multiple response options were allowed.


In the past 12 months, has there been an increase, a decrease or no change in the number of employees…

Increase Decrease No change 2008 2009 2008 2009 2008 2009

Planning to extend their retirement date due to the recession? — 68% — 0% — 32%

Reducing their 401(k) contribution? — 67% — 2% — 31%

Suspending contribution to their 401(k)?

— 62% — 2% — 36%

Asking for advances on their 401 (k) savings? 39% 49% 3% 1% 59% 50%

Requesting for more guidance and information specific to investing/retirement planning? — 47% — 1% — 52%

Reporting losing their homes (due to foreclosure/inability to pay rent, other reasons)? 14% 30% 0% 0% 86% 70%

Having their wages garnished by collection agencies? 26% 26% 6% 1% 68% 73%

Not rolling over their 401(k) savings after employment termination? — 21% — 3% — 76%Cashing out (i.e., prematurely before reaching retirement age) their 401(k) savings completely? — 18% — 0% — 81%

Asking for advances on their wages? 20% 16% 2% 1% 77% 83%

Increasing their 401(k) contribution? — 10% — 35% — 55%

n = 328-469

Note: Respondents who answered “Don't know” were excluded from this analysis. A dash (—) indicates that this particular option was not available in 2008

The respondents who indicated increases in the number of employees planning to 1) extend their retirement date; 2) reduce their 401 (k) contribution; 3) suspend contribution to their 401 (k) attributed the increase to:

• Fears about decline in financial security (e.g., dissatisfaction with 401(k) performance, diverting 401(k) funds/other funds to personal savings account).

• Decreases in household income.


Yes, employees are automatically enrolled into our organization’s defined contribution retirement sav-

ings plan

20% 30% 40%

30%

30%

32%

32%

35%

2009 2008 2007 2006 2005

Does your organization automatically enroll its employees into your organization’s defined contribution retirement savings plan (i.e., 401(k)), meaning that employees are placed into the plan unless they opt out?

Source: 2009 Employee Benefits: A Survey Report by SHRM


In your automatic enrollment plan, what is the default percentage of salary that is deferred?

2006 (n = 65) 2009 (n = 189)

Less than 2% 21% 21%

2 to 4% 54% 68%

5 to 7% 10% 9%

8% or more 8% 2%

Other 7% 0%

NOTE: Percentage does not total 100% due to rounding. Only respondents whose organization automatically enrolled employees in defined contribution savings plan where included.


Of the employees automatically enrolled in your defined contribution retirement savings plan, approximately what percentage have opted out or chosen not to participate?

2006 (n = 65) 2009 (n = 189)Less than 1% 60% 51%

1 to 2% 22% 26%

3 to 4% 8% 13%

5% or more 10% 10%

NOTE: Percentage does not total 100% due to rounding. Only respondents whose organization automatically enrolled employees in defined contribution savings plan where included.


Other

No, but we are considering implementing this option

No, and we have no plans to do so

Yes

0% 10% 20% 30% 40% 50% 60% 70% 80%

2%

13%

77%

8%

4%

4%

75%

17%

2009 (n = 499) 2006 (n = 273)

Does your organization’s defined contribution retirement savings plan include a feature that automatically increases employees’ deferral rates (i.e., participant contribution rates are automatically increased each year)?


Have you seen an increase in the number of employees opting out of your organization’s automatic employee deferral rate?

Yes; 21%

No; 79%

Differences by Organization Staff Size

Small Medium Large

Yes 23% 19% 26%

No 77% 81% 74%

n = 307

Note: Excludes respondents who answered “don’t know”..Organization staff size: small = 1-99 employees, medium = 100-499 employees, large = 500 or more employees


Are employees at your organization more or less confident about the adequacy of their retirement savings now compared with six months ago?

More confident2% About the

same31%

Less con-fident67%

n = 518

Note: Excludes respondents who answered “Not sure.”


In the past 12 months, has there been an increase, a decrease or no change in the number of employees at your organization getting more involved in the management of their retirement plan?

Increase53%

No change

44%

Decrease4%

n = 518

Note: Excludes respondents who answered “Not sure.”


What do you see as the biggest threat to the retirement savings of employees at your organization?

Other

The current and future financial instability of my organization

The inadequacy of government retirement programs (i.e., Social Security)

Employer-based retirement offerings alone are not enough to provide solid retirement savings

Employees do not understand their retirement options (financial literacy)

The instability of the financial markets

Employees are not saving enough for retirement

0% 10% 20% 30% 40%

2%

3%

7%

10%

14%

32%

32%

n = 521


How confident are you that your organization’s retirement savings option is meeting your employees’ retirement needs?

Very con-

fident23%

Somewhat confident59%

Not at all confi-dent18%

Differences by Organization Staff Size

Small Medium Large

Very confident 20% 26% 24%

Somewhat confident

58% 59% 59%

Not at all confident

22% 16% 18%

n = 514

Note: Organization staff size: small = 1-99 employees, medium = 100-499 employees, large = 500 or more employees


What percentage of the employees at your current location are in each generation?

Nexters (aka Millenials, Generation Y) - born 1981 and later (ages 28 and younger)

Generation X - born 1965-1980 (ages 29-44)

Baby Boomers - born 1945-1964 (ages 45-64)

Veterans (aka Traditionalists, WWII Generation) - born 1944 and earlier (ages 65 and older)

0% 10% 20% 30% 40% 50%

12%

34%

44%

10%

17%

36%

41%

6%

2009 (n = 440) 2004 (n = 249)

n = 440


Small (1 to 99 employees) Medium (100 to 499 employees) Large (500 or more employees)0%

10%

20%

30%

40%

32%

38%

30%

n = 502

Organization Staff Size


Organization Sector

Government sector

Nonprofit organization

Publicly owned for profit

Privately owned for profit

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

9%

17%

20%

54%

n = 507


SHRM Poll – The U.S. Recession and Its Impact on Employee Retirement

• Response rate = 12%• Sample comprised of 563 randomly selected

HR professionals from SHRM’s membership.• Margin of error = +/- 5%.• Survey fielded the week of July 6, 2009.

Methodology