October 9, 2013 (PLANSPONSOR.com) - An increasing number of plan sponsors are pointing to participant outcomes, not participation rates, as the best measure of success for an employer-sponsored retirement plan.
Transamerica Retirement Solutions “Report on Retirement Plans 2013: The Road to
Retirement Readiness” compiled data on both the defined contribution (DC) and
defined benefit (DB) plans of U.S. corporations with at least 1,000 employees.
In their analysis, researchers found 41% of respondents said helping employees
accumulate retirement income is the primary goal of their plan—a significant
jump from the 35% measured in 2012.
percent of plan sponsors reported “keeping up with regulatory changes” is a
primary hurdle to plan success.
also indicated that “motivating employees to save adequately” (55%) and
“helping participants invest wisely” (46 %) are primary challenges in the
industry. The study found nine out of 10 plans (90%) reported average
contribution rates below the 10% of income target widely considered a
best-practice. Forty-six percent of sponsors reported an average contribution
rate of 4% or less.
also indicated rising health care costs have complicated their attempts to
address retirement security.
used the data to identify ways sponsors are meeting these challenges. Examples
of those measures include offering automatic enrollment features, which are
currently included in nearly half (48%) of the 401(k) plans managed by sponsors
interviewed for the survey. Sponsors can also try streamlining investment
options and utilizing online resources that provide access to saving and
investing guidance, Transamerica said.
To request a full
copy of the report, send an email to email@example.com.