Findings from the 3rd annual Mercer Retirement Readiness Barometer


Advantages of workplace plans for your employees:

Employer contributions
incentivize employees to save and to help amplify their saving power.

Plan oversight
offers employees assurance that they can access reputable investment funds to suit their needs.

Group pooling
provides the greatest advantage. Accessing lower investment management fees may seem like a small advantage. But the gains add up to real benefits over time.

Lower fees provide more income in retirement

Retirement ready at age 66 or
67% probability of not running out of money if retiring at age 65

Retirement ready at age 70 or
35% probability of not running out of money if retiring at age 65

What is the effect of higher fees on your employees?

Delay retirement readiness —

Retirees have to work 4 extra years.

Impact post-retirement income —

Retirees can run out of money 12 years earlier if retired at age 65.

At retirement, employees move their money out of their workplace Defined Contribution (DC) and savings plan.

Fees tend to be higher at that point, which can impact how long the savings will last.

If an employee retires at age 65, they are expected to run out of money 5 years earlier.

Savings can last longer during retirement with a little help from employers. To improve employee retirement readiness:

Sharpen your investment strategy

  • Conduct due diligence on your target date funds in an inflationary environment.
  • Ensure the funds available to your employees are structured to meet their needs.

Support employee financial wellness

  • Invest in education to boost plan member confidence.
  • Design your plan with flexibility to meet all employee life needs.

Smooth the transition to retirement

  • Conduct a retirement readiness analysis of your workforce.
  • Carry out a diagnostic of your existing plan to ensure your members are empowered in retirement.

Make a plan to help ensure all your employees will be retirement ready. Contact your Mercer consultant today.