New research shows 68% of union members are confident they will be ready for retirement

72% feel very strongly about their ability to save

GREENWOOD VILLAGE, COLO. October 11, 2023 –  American workers who are members of labor unions are reporting a high degree of confidence in their ability to save for retirement, despite widespread indication that economic pressures are putting strain on their household finances, according to a first-of-its-kind research paper being published by Empower.

According to the paper, which was released during the recent International Foundation of Employee Benefits conference, 68% of union members are optimistic they will be ready for retirement financially and 72% say they also feel confident about their ability to save.

Empower, the largest provider of Taft-Hartley defined contribution (DC) plans by both assets and participants* launched the study of its own platform data, which examines the financial wellness of union members and how Taft-Hartley DC plans are contributing to their retirement readiness.

According to the research, Taft-Hartley plan members still rely on a traditional mix of defined benefit and defined contribution plans to support their retirement savings plan, both of which play an important role in preparing union members for retirement.

This new research analyzed more than 250 Taft-Hartley plans, serving approximately 900,000 members with  $75 billion in assets under administration** to demonstrate the role of DC plans in union members’ retirement security.

A survey of union members is included to provide insight as to how workers are faring in the current economic environment as are interviews with representatives of unions and related associations, including American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), North America's Building Trades Unions (NABTU), National Electrical Contractors Association (NECA), and the International Association of Heat and Frost Insulators and Allied Workers.

“Unions have consistently and continuously helped to improve the workplace for American workers and the establishment of the Taft-Hartley plan type is a key contribution,” said Rich Linton, president and chief operating officer, Empower. “These plans help to improve member confidence and their financial outcomes.”

• Do it yourself (DIY): 53% of participants select their own investments based on available plan options.
• Target date fund (TDF): 46% of participants invest in a professionally managed asset allocation fund with a selected target year for retirement that becomes more conservative as the selected retirement date approaches. Today, almost 90% of plans offer TDF options.
• Managed accounts: Currently, one in five plans offer managed accounts. With this strategy, participants invest in professionally managed investment solutions that are personalized to individual goals and situations. Trustees have increasingly been adding these advisory services to their plans over the past year.

The Empower survey*** (not limited to Empower participants) determined that union members report faring well when asked about their financial circumstances. Union members indicate that they believe they have a solid retirement plan (70%). The average account balance is $83,087 and 10% have balances greater than $250,000, and almost 5,000 members have over $1 million saved.

Union members report retirement savings, paying off debt, and building an emergency savings fund as their top goals.

Retirement plan loan concerns: Almost half (47%) of union members say they have or plan to take out a loan or hardship withdrawal from their retirement savings accounts. More than 24% percent of union members have taken, and 22% plan to take out a loan or hardship withdrawal from their retirement savings accounts. Hardship withdrawals and loans are widely available in Taft-Hartley retirement plans, and close to 70% of these plans offer one or both withdrawal options. In these plans, 6.3% of participants have an outstanding loan, and 0.2% had taken a hardship withdrawal as of mid-year 2023. The average dollar amounts for outstanding loans ($13,536) and hardship withdrawals ($20,785) taken are notable.

Learn more about Empower’s Taft-Hartley business.

ABOUT EMPOWER

Recognized as the second-largest retirement recordkeeper in the U.S.,1 Empower is a leading provider of financial services, including advice, wealth management, investing, and retirement services. Headquartered in Greenwood Village, Colo., Empower administers approximately $1.4 trillion in assets for more than 18 million investors.2 Connect with us on empower.com, Facebook, Twitter, LinkedIn, TikTok, and Instagram.

* As of June 30, 2023.

** Ibid.

*** Empower contracted Morning Consult to conduct a poll August 2023, among a national sample of 4,413 adults ages 18+, including 421 union members.

Media contacts:

Stephen Gawlik - Stephen.Gawlik@empower.com

Mandy Cassano - Mandy.Cassano@empower.com