Research results show that many employers offer contributions above the minimum that are often not targeted at those who may be most in need: 4 out of 10 workers work for organizations that offer more than 3% minimum employer contribution to all of their employees. The report also shows that, while automatic enrollment has significantly equalized access to occupational pension savings and employer contributions when raising the floor for all workers, access to contributions above the minimum is not evenly distributed. On the one hand, about half of large employers offer more than the minimum, compared to a quarter of small businesses. On the other hand, employers are more likely to offer contributions above the minimum if they have predominantly salaried, high income, highly skilled and long term workers.

The report also reveals that employers see a very limited opportunity to voluntarily increase their contribution rates, but show interest in innovations such as:

1. Wage sacrifice: 2 out of 3 employers thought a wage sacrifice approach was attractive, in which tax savings could potentially be added to pension contributions to increase the employee’s retirement savings
2. Automatic scaling – 5 out of 10 employers liked the idea of an automatic scaling approach in which employees can commit to automatically increasing their future pension contributions, when they get a raise or after one year, for example.
3. Hybrid approaches – Approximately 4 of 10 employers thought that combining pension savings and other forms of savings, such as for example, a hybrid “sidecar savings” model in which employees accumulate a liquid emergency savings fund along with their retirement savings, was attractive.
4. Higher default values with an opt-out option: About 1 in 3 employers found this approach attractive. In this model, employees could opt for minimum contributions from a higher default value, rather than having to choose to make higher contributions.

To review the entire study, click here.