UpFront | Published in June 2012

Auto-Enrollment Up

Half of plan sponsors offer this tool

By Tara Cantore | June 2012
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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 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 hope for continuing strides in educating participants about the merits of their retirement plans. The lack of participant understanding of the retirement plan benefit is a major concern, yet satisfaction levels seem positive. Often the provider community has offered multiple options, trying to meet the educational requirements and needs of both the plan sponsor and participants.

When asked about overall participant satisfaction with planning tools and options available through website materials and meetings, 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 (PPA), target-date funds (TDFs) have grown exponentially both in usage and assets. The trend continues in Mesirow’s latest findings, with plan sponsors using TDFs for double-duty: as a plan’s qualified default investment alternative (QDIA) plus as a managed account strategy. The majority (72.4%) of respondents offer TDFs; 27.6% responded they do not.