Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 22nd, 2015
Benefits & Administration
Plan Sponsors Offer More Robust Auto Features
Seven out of 10 (70%) companies offer automatic enrollment features in their 401(k) plans, according to an Aon Hewitt pulse survey covering the fourth quarter of 2014. The retirement and health solutions company surveyed approximately 100 companies with defined contribution (DC) plans, finding 29% of employers auto-enroll their employees in the company plan at a savings rate that is at or above the full company match threshold. Another 27% auto-enroll their employees below the full match rate, but automatically escalate contributions over time, enabling workers to save enough to receive the full match.Read more >
How to Select a Lifetime Income Product Provider
Plan sponsors do not have to provide in-plan lifetime income solutions for their plan participants. However, the topic is heating up as the issue of how participants will manage account balances to provide sustainable lifelong income garners more attention. In a whitepaper, “Fiduciary Considerations in Selecting a Lifetime Income Provider for a Defined Contribution Plan,” Fred Reish and Bruce Ashton, Drinker Biddle attorneys who specialize in Employee Retirement Income Security Act (ERISA) issues, and Steven Kronheim, vice president and associate general counsel at TIAA-CREF say fiduciaries responsible for selecting annuity providers should consider four main factors.Read more >
Regulations, Work Force Changes Challenge Plan Sponsors
Apart from the statutory changes to the Employee Retirement Income Security Act (ERISA), respondents to a survey fielded by Buck Consultants noted other changes in the 40 years since ERISA was enacted that directly and indirectly impact employee retirement benefits. These include such trends as increased employee turnover and the decline of “career” employees, as well as a graying work force that might not be able to retire because they have not saved enough. Read more >
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