2012 Hot Topics in Retirement - Aon

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Employer Confidence in Program Management and Prioritization Confidence Level of Employers in E�ectively Managing Their Retirement Program Issues and Priorities in 2012 Retirement Program Issues Competitive position of the plan The influence of employee diversity and inclusion on retirement benefit e�ectiveness Employees’ understanding and knowledge of the employer-sponsored resources they have available Employees taking accountability for their own retirement success The aging workforce and the impact retirements could have on your business in the next 5 to 10 years Policies and procedures that appropriately influence the patterns of employee retirements* Employees retiring with su�cient retirement assets Employees’ ability to manage their retirement income to last for the rest of their lifetime (n ranges from 413 to 421) *For example, phased retirement, early retirement subsidies 12 Aon Hewitt The confidence employers have in their employees’ ability to retire with su�cient assets fell o� sharply from 2011 to 2012. Last year, 30% of employers felt “very confident” in their employees’ ability to retire with adequate income; however, this year that percentage dropped to only 4%. In addition, in 2012 only 18% of employers feel very confident that workers will be able to manage their income while in retirement, and only 10% of employers feel very confident that their employees take accountability for their own retirement success, down from 38% last year. Yet, in terms of prioritization, more than half of respondents (52%) felt this was a high priority of the plan. Roughly four in 10 (39%) continue to feel very confident in the competitive position of their plan, which is consistent with prior years. Smaller organizations (with fewer than 1,000 employees) are generally more confident across nearly all types of retirement program issues. Very Confident 1 39% 18% 13% 10% 7% Confidence Level Not Confident at All 2 3 4 5 6 36% 18% 4% 32% 32% 12% 40% 33% 12% 23% 42% 19% 29% 37% 21% 3% 4% 2% 6% 6% 6% 25% 33% 22% 11% 4% 22% 35% 23% 15% 4% 14% 33% 28% 15% 0% 2% 0% 1% 0% 3% 3% 6% High Priority 1 48% 18% 60% 52% 36% 14% 44% 33% Priority Level Medium Priority 2 41% 42% 36% 42% 41% 47% 46% 49% Low Priority 3 12% 41% 4% 7% 23% 39% 10% 18%
Retirement Plan Initiatives for 2012 Likely Initiatives for Retirement Plans in 2012 Initiative Assess your current retirement program design Measure the competitive position of the retirement program Create or focus on financial well-being of employees (packaging, resources, messaging) Measure/project the expected retirement income adequacy of your employee population Analyze the influence of your current and emerging demographics on retirement designs, policies, and practices Look at di�erences in retirement behaviors and outcomes based on race and ethnicity Collect data on employee preferences regarding the retirement program Evaluate phased retirement alternatives (n ranges from 415 to 417) Employers are taking steps to review their retirement programs in 2012. More than 60% of respondents state that they are very or somewhat likely to assess the current retirement program design, and 73% are likely to measure the competitive position of their retirement programs. One-half (50%) of plan sponsors are likely to analyze the influence of their current and emerging demographics on retirement designs, policies, and practices while 50% intend to project employee retirement income adequacy. These results indicate the continued focus and importance of retirement programs in 2012. Very Likely 36% 35% 32% 16% 15% 13% 9% 7% Somewhat Likely 25% 38% 42% 34% 35% 31% 28% 23% Somewhat Unlikely 22% 14% 20% 35% 36% 37% 39% 39% Very Unlikely 17% 13% 6% 15% 13% 19% 24% 30% Aon Hewitt 13
Page 1 and 2: Consulting/HR Outsourcing Retiremen
Page 3 and 4: 4 10 14 33 42 48 2012 Hot Topics in
Page 5 and 6: Enhanced Automation and Individuali
Page 7 and 8: Defined Contribution Plans: Increas
Page 9 and 10: Retiree Medical Plans: Reducing Cos
Page 11: Defined Benefit Status —Among Spo
Page 15 and 16: Employers understand the importance
Page 17 and 18: Initial Contribution Rate Default U
Page 19 and 20: Contribution Escalation Getting ind
Page 21 and 22: Roth Most financial experts agree t
Page 23 and 24: Employer Matching Contributions Inv
Page 25 and 26: Current and Future Actions on Targe
Page 27 and 28: Barriers to Adding Retirement Incom
Page 29 and 30: Communication Initiatives Many empl
Page 31 and 32: Managing Risk and Plan Expenses Ove
Page 33 and 34: Defined Benefit Plans Likely Change
Page 35 and 36: Likely Actions Planned in 2012 Risk
Page 37 and 38: Confidence and Priority Level of Ri
Page 39 and 40: Pension Plan Funded Status With his
Page 41 and 42: Funding Policy One-half of responde
Page 43 and 44: Percentage of Employers With a Pre-
Page 45 and 46: Changes to Benefits From 2011 to 20
Page 47 and 48: Likely Changes to Retiree Health Be
Page 50: About Aon Hewitt Aon Hewitt is the

2012 Hot Topics in Retirement - Aon

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