Data & Research March 8, 2011

Americans Want Pensions Back

A public opinion research report indicates Americans think the recession revealed the flaws in the current retirement plan landscape and the government should make it easier for employers to offer pensions.

Reported by

Rebecca Moore

According to “Pensions and Retirement Security 2011: A Roadmap for Policymakers,” released by the National Institute on Retirement Security, nearly nine of 10 Americans polled believe the retirement system is under stress and needs to be reformed. More than 80% of Americans believe that recent economic downturn exposed the risks of America’s retirement system, and nearly three-quarters believe that stock market volatility makes it impossible for the average American to predict how much money they will have in their nest egg when they retire.

The poll results suggest pensions are reliable and relieve retirement anxiety. Eighty-three percent of Americans surveyed indicated that those with pensions are more likely to have a secure retirement, and 72% of those who have a pension are confident it will be there at retirement. In addition, 75% believe the disappearance of pensions has made it harder to achieve the “American Dream.”

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Nearly 80% of respondents believe leaders in Washington do not understand how hard it is to prepare for retirement in this economy. Eighty-three percent say the government should make it easier for employers to offer pensions, and 81% believe that Washington leaders need to give a higher priority to ensuring more Americans can have a secure retirement.

Eighty-four percent of Americans surveyed are concerned that current economic conditions are impacting their ability to achieve a secure retirement, with more than half (54%) very concerned.

They have lowered their expectations for retirement, defining a secure retirement as simply surviving or living comfortably (34%), paying their bills (17%), and maintaining their pre-retirement lifestyle (11%). Only 11% expect retirement to include leisure, travel, restaurants, and/or hobbies.

The research found Americans are taking a number of actions to improve their retirement prospects-saving more, getting rid of debt, delaying retirement, or looking for jobs with a pension.

The report is here.

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Deals & People March 8, 2011

Aon Hewitt, Financial Engines Team on Advice

Effective immediately, Aon Hewitt is bringing advice to its 401(k) recordkeeping clients.

Reported by

Nevin E. Adams, JD

Under the relationship, Aon Hewitt Financial Advisors, LLC, an Aon Hewitt subsidiary, will serve as the provider of investment advisory services and serve as the fiduciary of the advice and management provided.

According to the announcement, Financial Engines was selected to serve as the independent sub-advisor and will provide the advisory platform to deliver the service, expanding the established strategic alliance between Aon Hewitt and Financial Engines.

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“Our research1 shows that just 18 percent of workers are on track to meet their retirement savings needs,” said Scott Parry, leader of Aon Hewitt Financial Advisors. “Those employees who are falling short often make fundamental investing mistakes such as taking on inappropriate risk or not diversifying their portfolios that could easily be corrected given high-quality advice and management. By integrating the Financial Engines advisory platform into our broader administrative solution, we can deliver more personalized advice and management to 401(k) participants to help them avoid these pitfalls. This new service reflects our commitment to provide our clients with the right tools to help their workers save for retirement.”

The service will give participants whose companies choose Aon Hewitt for administration of their savings plan access to Financial Engines’ full suite of services including Online Advice and Professional Management. According to the announcement, Aon Hewitt’s experience with pension and retiree medical plans is integrated with the solution to offer the total retirement picture to plan participants. Additionally, for workers who enroll in Aon Hewitt’s Professional Management program, registered investment representatives will provide personalized advice including help with “savings, managing risk-appropriate portfolios, identifying their income needs in retirement, and turning their 401(k) savings into steady lifetime income,” according to a press release.

Aon Hewitt and Financial Engines will continue to support the delivery of advisory services under existing client agreements whereby Financial Engines provides advisory services directly to Aon Hewitt clients.