New report shows more government workers engaged in retirement planning
Nationwide Retirement Education Institute study cites increases in public sector participation - still work to be done
FOR IMMEDIATE RELEASE
April 13, 2006
Hillary Jeffers (614) 677-8978
Carah Brody (614) 677-0275
COLUMBUS, Ohio— The Nationwide Retirement Education InstituteSM published a report today that shows more government employees are investing for retirement. The Institute is sponsored by Nationwide Retirement Solutions, the division of Nationwide Financial Services, Inc. (NYSE:NFS) that specializes in providing supplemental retirement plans to government employees.
The report, entitled America’s Retirement Voice: Trends in Public Sector Retirement Plans takes a comprehensive look at the public-sector retirement system with respect to participation and investment trends, demographic differences among participants and highlights on how public-sector participants differ from their private-sector counterparts. Compared to the first report published in 2004, the new study shows many positive trends in public sector retirement saving and investing habits including:
- Overall participation rates increased from 30 percent in 2003 to 34 percent in 2005,however, public sector plan participation continues to lag behind 401(k) plans which average 70 percent participation.
Improved Investment practices:
- Participants who are invested in three or more asset classes rose from 19 percent in 2001 to 39 percent in 2005.
- Average annual contributions increased by eight percent from $3,500 in 2003 to almost $3,800 in 2005 among all participant age groups.
Younger participants are getting the message:
- Those aged 18 – 25 increased their average annual contributions by 20 percent since 2003, compared to a range of nine to 17 percent in other age groups.
- Almost 30% of participants who are ages 18 – 25 selected an asset allocation option (lifestyle and lifecycle funds) as their single investment choice for ongoing deferrals, showing an understanding of the need to diversify investments, compared to a range of 3% to 18% for all other age groups.
“We’re encouraged to see that education is working,” said Matthew Riebel, president of Nationwide Retirement Solutions. “More people are getting the message ‘my retirement matters now,’ but we still have a long way to go. With less than half of all eligible government employees participating in their employer’s plans, we need to debunk the perception that, ‘my pension will cover all my financial needs in retirement’ and motivate people to jump on the personal savings bandwagon.”
Riebel continued, “As people live longer and health care costs escalate, it is likely that employees will need to save more on their own to satisfy these needs in retirement. Plan sponsors are in a unique position to help them bridge the gap by offering strong supplemental savings programs.
Plan sponsors, providers and policy makers must collaborate to do everything possible to encourage and simplify personal investing at the individual level. I hope this research will shine a light on the need to invest and prompt people to take action.”
An executive summary and report methodology may be obtained by visiting www.NRSFORU.com.
About Nationwide Financial
Nationwide Financial Services, Inc. (NYSE: NFS), a publicly traded company based in Columbus, Ohio, provides a variety of financial services that help consumers invest and protect their long-term assets, and offers retirement plans and services through both public- and private-sector employers.
It’s part of the Nationwide group of companies, which offers diversified insurance and financial services. The group is led by Nationwide Mutual Insurance Company, which is ranked No. 98 on the Fortune 100 based on 2005 revenue1. For more information, visit www.nationwide.com.
Nationwide and the Nationwide Framemark are federally registered service marks of Nationwide Mutual Insurance Company.Nationwide Investment Services Corporation, member NASD. In MI only: Nationwide Investment Svcs. Corporation. The Nationwide Retirement Education Institute is a service mark of Nationwide Mutual Insurance Company.
1 Fortune Magazine, April 2006
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Investments Retirement Insurance www.nationwide.com One Nationwide Plaza Columbus, OH 43215-2220