Americans Willing to Consider Reducing Standard of Living to Ensure a Secure Retirement.

Business/Lifestyle Editors

LOS ANGELES--(BUSINESS WIRE)--Nov. 13, 2001

2001 Transamerica Retirement Survey and Post-Sept. 11 Follow-Up Poll

Reveal Worker, Employer Attitudes Toward Retirement

As the shrinking Federal budget surplus puts new pressure on Social Security, many Americans plan to boost their savings where they work or on their own.

The 2001 Transamerica Retirement Survey, as well as a follow-up poll taken after Sept. 11, reveal nearly nine in 10 think most Americans do not salt away enough money to live comfortably throughout their retirement years. More than half the employees polled say they are somewhat or very likely to trim their lifestyles to set aside more for retirement.

The post-Sept. 11 poll also indicates that in the aftermath of terrorist attacks against the United States, Americans are standing firm: 82 percent of those polled in mid-October report their attitudes about saving for retirement have not changed since the attacks. Their rationale includes: "the economy is sound," "I have a good plan -- the attack didn't affect the plan," "the system will rebound, and we'll come back," and "I have confidence in the country."

However, there was a significant decrease in one measure of confidence before and after Sept. 11, particularly among women. When asked how confident they are that they will have achieved their retirement savings goals by the time they reach retirement age, in the August survey, 21 percent of women and 30 percent of men said that they are "very confident," compared with 8 percent of women and 28 percent of men in the October survey.

For the third year in a row(a), both surveys indicate retirement benefits continue to outweigh compensation as a factor in choosing an employer. Most survey respondents indicate that, all things being equal, they would prefer a job that meets their salary requirements and has excellent retirement benefits over a job with a higher salary but poor retirement benefits.

However, while the polls indicate that retirement programs like 401(k) and profit-sharing plans are extremely popular benefits, poll data also show many small businesses still don't offer them, and many employers do not realize how important these benefits are to employees.

While less than one-quarter of workers say they are familiar with the recent tax law changes regarding retirement savings, when asked about specific retirement provisions, many workers express an interest in the enhanced retirement savings opportunities.

"The majority of employees intend to take advantage of the enhanced retirement savings opportunities that will be available in 2002 through the tax-reduction bill(b) enacted in July," said Tom Schlossberg, president and chief executive officer of Transamerica Retirement Services. "Two out of three employees plan to take advantage of increased limits on tax-deferred contributions to retirement plans at some point, and more than half plan to eventually take advantage of 'catch-up' contribution opportunities for workers age 50 plus."

Similarly, two out of three employers who are familiar with the increased contribution limits and catch-up provisions think these new opportunities will have an impact on their companies and their employees. However, the survey data also show that many employers are not yet aware of the enhanced pension provisions, less restrictive requirements and tax credits offered through recent tax legislation to small businesses setting up new retirement plans.

"We believe that as employers learn more about the increased ease and reduced expense of setting up retirement plans for their employees, more and more small businesses will offer their employees this much-needed benefit," said Schlossberg.

While most employees plan to boost their savings, a large proportion of workers -- four in 10 -- admit they do not know how much they will need to feel secure in retirement. Almost 40 percent confess they obtained their retirement savings estimate by guessing. "This underlines the importance -- documented in our previous surveys -- of providing workers with quality education about retirement planning," said Catherine Collinson, senior vice president of Transamerica Retirement Services.

On the plus side, the vast majority of workers (86 percent) surveyed report they do have some retirement savings and half started saving before age 30. Seventy percent report that their company offers a retirement savings plan, such as a 401(k) or profit-sharing plan, and among workers whose company offers a plan, 80 percent say they participate. In addition, six out of 10 workers currently save for retirement outside of work, such as in an IRA or mutual fund.

Conducted by the research firm of Mathew Greenwald & Associates, the first poll surveyed 500 workers and 200 employers in August 2001, with a margin of error of four percentage points for workers and seven percentage points for employers. The second poll was conducted Oct. 10-16, by International Communications Research (ICR), and surveyed 226 workers, with a margin of error of seven percentage points.

"Many small employers that don't yet offer a plan may think that their workers wouldn't participate because their business can't afford to match worker contributions," said Ruth Helman of Mathew Greenwald & Associates. "But more than a third of the workers polled who don't currently have access to a retirement savings plan say they would be very likely to participate if their employer were to offer a plan -- even if there were no match. Three-fourths of these workers said they would be very likely to contribute if there were some type of employer match involved."

Top-10(c) retirement services provider Transamerica Retirement Services offers retirement plan products and services nationwide through Transamerica Life Insurance and Annuity Co., Transamerica Occidental Life Insurance Co., AUSA Life Insurance Co. Inc. and Diversified Investors Securities Corp., all members of the AEGON Group, one of the world's largest financial services organizations(d). Retirement plan information is available to the public toll free at 888/401-5826 or on Transamerica's award-winning interactive Web site, www.TA-Retirement.com.

Note to Editors:

-- Reports on the Transamerica Retirement Survey as well as the post-Sept. 11
follow-up poll, which include employee and employer attitudes toward a variety
of retirement planning issues, are available at www.TA-Retirement.com or on
request by calling Catherine Lockwood at 213/742-2977, Carol Bromberg at
213/742-4014 or Erick Kanter at 703/534-2150.

-- Interviews are also available on request.

(a) This is the third year Transamerica Retirement Services has commissioned surveys to measure attitudes toward retirement. The previous surveys were released in December 1998 and July 2000.

(b) The tax-reduction bill refers to the "Economic Growth and Tax Relief Reconciliation Act of 2001" or "EGTRRA."

(c) Transamerica Retirement Services' ranking as a top-10 provider is based on information in an April 2001 CFO MAGAZINE report, "CFO Buyer's Guide: 401(k) Providers" about retirement services providers, based on the number of plans in force.

(d) Based on assets (Source: WALL STREET JOURNAL, Oct. 1, 2001).