Hello Icarusdlqx,
Below you will find the results of my research regarding employee
retention and pension plans.
According to a Diversified Investment Advisors' Report on Retirement
Plans, the majority of U.S. companies (84%) that currently offer a
defined benefit plan such as a traditional pension plan, cash balance
plan, or a pension-equity plan believe their plan directly impacts
employee retention.
"Most employers see a tangible value in offering a defined benefit
plan to their employees -- despite the high costs typically associated
with it," said Chris Cumming, senior vice president and defined
contribution plan business leader at Diversified. "In fact, nearly
one-third of those employers said that defined benefit plans had a
major impact on employee retention."
?According to the Diversified survey, large employers are more likely
to say their plan had a major impact on employee retention. For
example, 58% of plan sponsors with 25,000 employees or more believe
that their defined benefit plan has had a major impact on retention
compared to 23% of companies with only 1,000 to 2,499 employees."
"Majority of U.S. Companies That Offer a Pension Plan Say It Impacts
Employee Retention, New Survey Shows". Business Wire. Sept 7, 2004.
FindArticles.com. 09 Oct. 2006.
http://www.findarticles.com/p/articles/mi_m0EIN/is_2004_Sept_7/ai_n6183549
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Pensions strongly influence workers? behavior, giving younger workers
a compelling reason to continue working for their employer and
encouraging older workers to retire on a timely basis.
?Empirical evidence indicates that pensions influence the type of
worker a firm attracts and can help an employer attract workers who
exhibit desirable behavior patterns. While the productivity effects
have been associated mostly with defined benefit plans, recent
research has shown that 401(k) plans exhibit similar effects in
shaping workers? behavior (Ippolito, 1997).?
According to The Watson Wyatt Retirement Attitude Survey , ?responding
workers who consider their defined benefit plan highly important are
over three times more likely to express a strong desire to stay at
their current organization than other workers (Table 1). Employees who
consider their defined contribution plan very important are 2.5 times
more likely to intend to stay with their current employer. In fact,
for both plan types, more than half of respondents who value their
retirement plans highly also indicate a high likelihood of staying
with their current employer. For employees who assign low importance
to their defined benefit plan, roughly equal numbers say the plan
would (36.3 percent) or would not (37.1 percent) influence their
decision to remain with their current employer. The situation is much
the same for workers who assign a low value to their defined
contribution plan.?
http://www.watsonwyatt.com/us/pubs/insider/showarticle.asp?ArticleID=14596
Table 1
http://www.watsonwyatt.com/images/database_uploads/14596/table1.jpg
Table 2
?Higher plan satisfaction is also strongly associated with an
employee?s intention to remain with his or her current employer . For
defined benefit plans, employees? overall satisfaction was determined
by combining employee ratings of eight features: value of benefits as
future income, information about current value, information about
projected value, form of benefit payout, benefit availability age,
years of service before vesting, ability to access funds before
retirement and how the plan compares with competitors? plans."
?Employees who are most satisfied with their defined benefit plan are
more than three times more likely than other employees to plan on
remaining with their employer until retirement. An equivalent
relationship emerges for employees who are highly satisfied with their
defined contribution plans. However, employees who are much less
satisfied with their defined benefit and defined contribution plans
are equally likely to plan on staying with their employer or not.?
http://www.watsonwyatt.com/images/database_uploads/14596/table2.jpg
?Employers typically experience significantly higher rates of turnover
among younger segments of their workforce. For many employers,
reducing turnover among these ranks is critical to their overall
success. Employees younger than 35 who value their plans most highly
and are very satisfied with them are more likely to remain with their
current employer than other young employees (Tables 3 and 4). This is
particularly true for defined benefit plans. Of those who are happy
with their defined benefit plan and consider it very important,
one-half say they firmly expect to stay with their employer. On the
defined contribution side, those who value their plans and consider
them very important also indicate a greater likelihood of sticking
around, but the difference is less pronounced than it is for defined
benefit plans. ?
Table 3
http://www.watsonwyatt.com/images/database_uploads/14596/table3.jpg
Table 4
http://www.watsonwyatt.com/images/database_uploads/14596/table4.jpg
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"How Do Retirement Plans Affect Employee Behavior?" (Watson Wyatt
Insider, April 2005), retirement plans can significantly boost
employees' commitment to their employers and affect the types of
employees a firm attracts.
http://www.watsonwyatt.com/us/pubs/insider/showarticle.asp?ArticleID=14860
Table 1 shows the relationship between benefit generosity and
employees' assessment of a plan's value in terms of attraction and
retention. http://www.watsonwyatt.com/images/database_uploads/14860/table1.jpg
Table 4
In companies that communicate more effectively, retirement plans make
more effective tools for attraction and retention.?
http://www.watsonwyatt.com/images/database_uploads/14860/table4.jpg
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?More than eight out of 10 US companies that offer a defined benefit
plan said the plan has a positive
impact on employee retention.?
Pension News - Winter 2004
http://www.apaco.ab.ca/pubs/pen-news/pension_news_winter04.pdf
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?Nearly half of employers cited employee retention as their primary
driver for keeping DB plans.?
Benefit News
http://www.benefitnews.com/detail.cfm?id=8389
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?According to the Diversified Investment Advisors? Report on Retirement Plans,
most large employers see a tangible value in offering a defined benefit plan to
their employees ? despite the high costs sometimes associated with it.
Fifty eight percent of plan sponsors with 25,000 or more employees
believe that their
DB plans have a major impact on employee retention.?
TRADITIONAL DEFINED BENEFIT PENSION PLANS:
A Tried and True System That Benefits Taxpayers
http://www.ncpers.org/artman/uploads/background_research_paper.pdf
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According to Drew E. Lawton, president and chief executive officer,
Fidelity Management Trust Company, "plan sponsors see DB plans as
valuable recruiting and retention vehicles," ?"In fact, almost half of
survey respondents cited employee retention as their primary driver
for continuing to offer benefits such as a DB pension plan, with the
vast majority (96 percent) believing that employees over 45 years of
age prefer DB plans to other retirement vehicles. In addition to the
more practical business benefits, 17 percent also indicated that they
continue to offer DB plans out of an altruistic sense of duty towards
their employees, while 20 percent of public plans see DB as a legacy
obligation."
Fidelity Management Trust Company
http://content.members.fidelity.com/Inside_Fidelity/fullStory/1,,6265,00.html
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Occupational Pension Plans, Group Registered Retirement Savings Plans,
and Employee Quit Transitions
http://www.press.uillinois.edu/journals/irra/proceedings2005/fang.html
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Search terms:
"Pension Plan" Impact OR benefits " Employee Retention" study OR survey
I hope the information provided is helpful!
Best regards,
Bobbie7 |
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