Only 28% of employees believe their current retirement savings strategy will help them reach their goals
By: R&I Editorial Team | October 20, 2026
Topics:Employee Benefits | News
Employers are leaning more heavily on automatic plan design features to close a persistent retirement readiness gap, as just 28% of employees believe their current savings strategy will enable them to achieve their goals, according to Gallagher’s 2026 Workforce Trends Series: Financial Benchmarks report.
The findings, based on the firm’s U.S. Benefits Strategy & Benchmarking Survey of 3,717 organizations in Q1 2026, along with data from the employee-facing 2026 Financial Health Assessment survey, show that 85% of employers offer retirement benefits, with 401(k) plans the dominant vehicle at 72%. Despite broad access, 30% of employees aged 55 and older say retirement planning is their biggest financial stressor, underscoring the gap between availability and outcomes.
Plan Design Takes Priority Over Individual Action
Rather than relying solely on employee decision-making, organizations are turning to automatic features to drive savings behavior, Gallagher found. Auto-enrollment is now used by 57% of employers, while auto-escalation is used by 33% and is expected to grow as SECURE 2.0 requirements for new plans take effect. The most common initial deferral percentage under auto-enrollment is 3.0%-3.9%, while the most common cap or maximum deferral percentage under auto-escalation is 14.0% or more.
On the contribution side, 42% of employers now offer immediate eligibility for defined contribution plan participation, up 5 points from 2025. Matching formulas of 50%-100% of employee contributions are used by 74% of employers, and 68% cap matching contributions between 4% and 6% of pay.
With many mandatory SECURE 2.0 provisions now embedded in routine administration, attention has shifted to optional features, though adoption remains uneven. Nearly half of employers report they have implemented no optional provisions or are unsure whether any have been adopted. Among those that have acted, 28% now offer a Roth option for employer contributions, up 6 points from 2025, and 26% increased force-out distribution limits to $7,000.
Gallagher noted that executive orders related to retirement policy have drawn attention but don’t change statutory requirements, with Kelly Lazzara, senior compliance counsel for Retirement Plan Consulting, saying such orders are “better understood as signals of where policy may evolve rather than something that requires a near-term response.”
Financial Wellbeing Broadens Beyond the Paycheck
Financial wellbeing has become a more visible workforce priority, with 45% of employers reporting it has increased in importance to their organization, according to the report. Gallagher found that 91% of employees recognize a connection between financial stress and mental health, and 74% say health care decisions are made with finances in mind. Support is expanding beyond retirement into health care accounts, debt management and emergency savings.
Nearly two-thirds of employers contribute to employee health savings accounts, with common annual contributions reaching $1,100 or more for individual coverage (23%) and $2,000 or more for family coverage (26%). Yet the report noted HSAs are often used for current expenses rather than preserved as long-term savings vehicles.
Emergency savings remain a significant gap, with 27% of employees reporting no emergency savings and another 24% reporting less than three months of expenses saved. Only 5% of employers offer formal emergency savings programs. More than two-thirds of employers offer tuition assistance, while student loan repayment contributions and student loan forgiveness are each offered by 14% of employers; only 2% report matching contributions on student loan payments.
Scaling Guidance and Managing Legacy Plans
To meet rising demand for personalized support, employers are expanding tools rather than one-on-one advice alone. More than four in five employers offer self-service tools such as calculators and modeling dashboards, 68% offer scheduled appointments with financial planners, and 48% offer managed accounts advice.
Molly Beer, Gallagher’s national practice leader for Retirement – Defined Contribution, said managed accounts, advice solutions and technology “help bridge the gap between the individualized support employees want and what organizations can realistically deliver.”
Among employers that still sponsor defined benefit plans, 78% expect their plans to remain active and not freeze over the next three years, and 86% aren’t considering additional de-risking strategies.
Retirement benefits for key employees, led by nonqualified deferred compensation and 457(b) plans, are largely being maintained rather than expanded, with adoption reaching 68% among large employers compared with 42% among small employers.
Obtain the full report here. &
The R&I Editorial Team can be reached at [email protected].
