Background:

In 2021, the RRC worked with AllianceBernstein on their study, “Inside the Minds of Plan Participants.” Over 1,000 full-time workers were surveyed on a wide variety of issues, including their preferences related to the features and benefits that are important to them when saving for retirement. The characteristics included:

- Be able to invest in a well-diversified mix of investments

- Have investment professionals automatically adjust my investments to become more conservative over time as I approach retirement

- Have my investments managed by investment managers whose names I recognizeHave my retirement savings be able to provide a steady income stream in retirement

- Protection of principal - if the market goes down, my money is protected

- The ability for my investments to grow in value as markets rise

Findings:

Advanced analytics were used to gauge preferences and find utility weights. This shows the relative value of feature preferences. A “steady stream of income in retirement” is the most heavily weighted characteristic. It is followed by a second tier of preferences including ‘growth as markets rise’ and ‘protection of principal.’ The bottom tier includes ‘well-diversified investment mix’ and ‘professional investment adjustments.’ It is important to note that these weights do not change when looking at participants and non-participants.

Bottom line:

The research clearly reveals what is important to workers as they make retirement investment decisions. Outcomes, such as stream of income, safety of principal, and growth potential, are more relevant, rather than how these outcomes are achieved.

Special thanks to AllianceBernstein for its collaboration and support of the RRC.