Defined contribution plans are all about preparing financially for retirement. However, some DC plan participants have other things on their mind as well.
According to Spectrem’s new report Financial Attitudes and Concerns of DC Participants, almost half of all DC plan participants consider the social responsibility of an investment when making investment selections for their DC plans. While that is well below other considerations (level of risk and diversity are the top two considerations), social responsibility is still a consideration for some plan participants.
Female plan participants are more interested in the social responsibility of an investment than males. Fifty-four percent of women say social responsibility matters, while only 39 percent of males do so.
Interestingly, the more a participant has in his retirement account, the less he is interested in social responsibility. While 61 percent of DC participants with less than $10,000 in their plan balance consider social responsibility, only 36 percent of DC participates with more than $100,000 in their plans give any thought to the social responsibility of their investments.
(To learn more about the report Financial Attitudes and Concerns of DC Participants, click here.)
Age is not a factor in the consideration of social responsibility, until a participant reaches the age of 65. Only 19 percent of the oldest participants consider social responsibility in their plan investments, while other age groups show approximately 50 percent of participates have an interest.
The reasons an investor would have for paying attention to social responsibility are many, including a desire to improve the world for their children, or wanting to provide funds towards positive changes in the environment or society. But there are an equal number of reasons why an investor would not care about the social responsibility of an investment.
For instance, 57 percent of DC plan participants say their investments are purely financial in nature, with no consideration for what is done with the funds invested other than increasing portfolios. Thirty-nine percent believe corporations claim to be socially responsible just as a public relations maneuver, while 31 percent straight out say they have never given much thought to socially responsibility investment choices. Four percent said they do not believe social responsibility is a corporate responsibility.