Benefits

Half of Plan Sponsors Offer Auto Enrollment

By Tara Cantore editors@plansponsor.com | April 17, 2012
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April 17, 2012 (PLANSPONSOR.com) - Plan automation solutions play a key role in the plan design process, according to a survey.  

The second annual Retirement Plan Survey by Mesirow Financial Retirement Plan Advisory found that 50% of plan sponsors surveyed offer automatic enrollment features, and one-third include a step-by-step deferral rate option.

According to the survey, plan sponsors are hopeful that positive strides continue in educating participants on the merits of participating in their retirement plans. The lack of participant understanding and appreciation of the retirement plan benefit is a major concern, yet satisfaction levels seem positive. In many circumstances, the provider community has offered multiple options in trying to meet the educational requirements and needs of both the plan sponsor and participants.

When asked how they would characterize overall participant satisfaction with different planning tools and, options available through the participant website materials and meetings to help reach saving goals, 14.4% of respondents said they were very satisfied; 75.6% were satisfied; 5.6% were not satisfied; and 4.4% do not use these options.

Since the finalization of the Pension Protection Act, target-date funds (TDFs) have grown exponentially both in usage and in assets. The trend continues in Mesirow’s latest findings as plan sponsors use TDFs for double duty as a plan’s QDIA and also as a managed account strategy. The majority (72.4%) of respondents do offer TDFs, while 27.6% responded they do not.