The 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.
Sixty percent of plan sponsors reported “keeping up with regulatory changes” is a primary hurdle to plan success.
Sponsors 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.
Respondents also indicated rising health care costs have complicated their attempts to address retirement security.
Researchers 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.
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