The percentage of younger US workers who say an employer-sponsored retirement program is important for either joining or staying with an employer has jumped sharply in the past two years, especially at employers that still offer a pension plan, according to a survey by global professional services company Towers Watson.
The survey found that among workers below age 40 whose employer offers a defined benefit (DB) pension plan, the percentage who agreed their retirement program was an important factor in accepting their job more than doubled -- from 28 percent in 2009 to 63 percent in 2011. That compares with a nine-percentage-point gain for younger employees at organizations that offer only a defined contribution (DC) plan.
Retirement plans have also become stronger retention tools among younger employees with a DB plan. Nearly three-fourths (72 percent) of these employees cite their retirement plan as a strong incentive to stay with their employer -- nearly double the percentage (37 percent) in 2009, and twice the retention value reported by younger workers whose employers offer only a DC plan.
“Two factors are likely causing this change: The combination of a slow economic recovery and more older employees delaying retirement is making it increasingly difficult for younger employees to find jobs or advance in their careers,” said David Speier, a senior retirement consultant at Towers Watson. “As a result, young workers are clearly giving much more weight toward both employer retirement and health care benefits when making career and employment decisions.”