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Deals & People June 29, 2010
Poll Shows Support for Income Guarantees in 401(k)s
A new survey indicates three-out-of-four (77%) U.S. adults support the concept of modifying the 401(k) retirement plan system to specify that employer contributions be used to provide a guaranteed stream of income.
Reported by Rebecca Moore
Younger adults (defined as 18 – 44 years of age) were even more likely (85%) to say they support such a retirement plan, according to a press release from Nationwide Financial Services, an annuity provider which sponsored the telephone poll conducted by Harris Interactive. In addition, the survey revealed that 72% of U.S. adults said they agree that the 401(k) system should be adapted to include features that offer guaranteed income at the point of retirement.
The concept is part of a new public policy proposal made by Nationwide Financial Services to government officials and members of Congress. Under Nationwide’s proposal, employers with defined contribution plans would purchase a guaranteed stream of income by using fixed income deferred annuities as the investment option for the employer match, the press release said.
Employees would still have control over and access to their own contributions, but the employer match would not be accessible for loans or early withdrawals. Employees could also choose to put their own deferrals in the guaranteed income option.
According to the survey, only 38% of adults currently have a 401(k) account and of those that don’t, 41% said it’s because their employer doesn’t offer one.
Nationwide’s proposal is here.