Survey Finds Employees Committed to Saving for Retirement

NORWOOD, MA, December 9, 2008 -- Employees participating in retirement savings plans, such as a company-sponsored 401k, remain committed to saving for retirement despite current and future concerns about the economy, according to the latest findings from the annual Mercer Workplace Survey(TM). Conducted in May and June of 2008 among 2,204 active 401k participants who also participate in their employer's health plan, this year's results indicate that the percentage of those who plan to continue contributing to their savings plans at their current rate remains virtually unchanged from the past two years.

Looking at the bigger financial picture, employees surveyed say that keeping up with monthly expenses remains their biggest financial worry for the second consecutive year at 19%, while 15% of respondents report that saving enough for retirement worries them most. Nevertheless, 71% say that saving for retirement remains a major financial objective, leveling off for the past two years after several years of decline as retirement savings gave way to short-term financial needs.

"The Mercer Workplace Survey is a powerful gauge of the sentiment and intentions of retirement savers in the American workforce," said Suzanne Nolan, Director of Marketing and Communications for Mercer's outsourcing business. "As a provider, we were encouraged to see that saving for retirement is still such an important goal, even in these unprecedented economic times."

The survey's findings were supported by Mercer participant transaction activity during the current market volatility. Even though Mercer saw a marked increase in call volume and website usage in October, participant transaction activity remained remarkably stable for the year ending November 30, 2008. In fact, loan requests remained relatively steady and actual changes to individual retirement plans and allocations were relatively small.

"We have seen an increase in participants shifting funds into more conservative plan choices, like capital preservation funds, and away from potentially higher risk/potential return options," explained Ms. Nolan. "It must be noted, however, that this activity since the beginning of September still represents only 8% of the entire participant population we administer. What remains to be seen is if the trend of employees 'staying the course,' will continue or if more pressing day-to-day financial commitments and continued losses in the market will win the day."

Of particular note, however, is that, even before the current economic turmoil, a full 44% of survey participants expect the economy to be in recession in 2009, double the amount from last year's findings. Additionally, nearly three quarters (72%) expect inflation in the coming year to be higher.

While survey findings point to participants currently committed to saving for retirement, the economic realities of the past year have led to further erosion in retirement expectations. In fact, since May of 2004, every aspect of retirement expectations that was asked about in the survey has declined. Leading the way is that fewer participants believe that they can live as well or better in retirement than working - down 20 points over the past four years. And the number of participants who think they will have enough money to pay for health care in retirement dropped from 53% to 39%. Driving this uncertainty is that health care costs in particular remain a major concern for participants; 60% are not confident that they will be able to cover these expenses.

One positive highlight from the survey is that it appears the increasing emphasis on employee education, especially in the area of health and benefit programs, is having the desired impact on improving the employee benefits experience. The greatest progress was associated with employees' experience with health benefit plans. Ease of understanding of the programs was up almost 10 points over last year, followed by ease of making changes to the plan and simplicity of enrollment.

"As participants become increasingly anxious about the economy and their ability to build a comfortable retirement, the more important it becomes to provide them with targeted communications and tools that focus on how to invest for retirement along with ongoing health care education and planning," said Ms. Nolan.

About the Survey

The Mercer Workplace Survey(TM) is an annual, proprietary research study conducted by an independent third party to track employees' attitudes and behaviors around employer-sponsored benefit plans. These findings are based on a national cross-section of 2,204 active 401k and health benefit participants.

About Mercer

Mercer is a leading global provider of consulting, outsourcing, and investment services. Mercer works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement, and other benefits. It is a leader in benefits outsourcing. Mercer's investment services include investment consulting and multi-manager investment management. Mercer's 18,000 employees are based in more than 40 countries. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York, Chicago, and London stock exchanges. For more information, visit www.mercer.com.

###

Click here for more material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues on 401k plans.

This is a press release provided by the company or its representatives. 401khelpcenter.com, LLC is not the author of this release and is not associated or affiliated with any firm or organization mentioned unless otherwise noted. Use of any information obtained from this release is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com, LLC.