According to a Fidelity news release, the Retirement Income Indicator allows an employer to see how auto enrolling all employees, by using automatic increase programs for contribution rates and providing lifecycle funds as the default investment option, can increase the amount of retirement replacement income their assets will generate.
In a study released Wednesday, Fidelity found corporate DC employees in plans it administers are on track to achieve 17% income replacement. Fidelity recommends a goal of saving enough to generate 85% of an investor’s pre-retirement income.
“Employers today rely on traditional metrics such as employee participation rates, deferral levels, asset allocation and account balances to assess the effectiveness of their plans,” said Jeffrey R. Carney, president of Retirement Services for Fidelity Employer Services Company (FESCo) in a news release. “Yet workers are being asked to think about their savings success based on how much income they can replace in retirement.”
More information is at www.fidelity.com .