A news release from Diversified Investment Advisors said that its Prescience 2010: Expert Opinions on the Future of Retirement Plans study found that online advice tools will be used by half of Generation Y consumers – up from 33% of Baby Boomers. On average, experts anticipate that 60% of all defined contribution plan participants will receive their account statement electronically and more than seven in 10 (73%) will access their retirement account through the Web. Two-thirds of newly eligible employees will enroll in their plan online using a text-based or voice-based system, the study found.
Also, researchers asserted that the online advice world should be an individualistic customizable place. When it comes to personalization, 79% of experts predict that all major plan providers will, at a minimum, personalize Web site content and statement messaging based on factors such as age, gender, and language. Seventy-three percent also believe that retirement plan providers will personalize communications based on such information as personal goals and interests as reported by plan participants.
In addition, eight in 10 of experts see online account aggregation becoming a standard service offered by retirement plan providers by 2010. Six out of ten panelists expect instant messaging and online chatting by text or voice to emerge as a communication vehicle between plan providers and participants. However, most experts (63%) do not believe that paper statements will have completely vanished by the end of the decade.
Among the study’s other findings were:
- By 2010, experts project that only 36% of employers with more than 1,000 employees will offer a defined benefit plan, down from 55% today. Experts do not expect the growth in employer-funded 401(a) plans to be commensurate with this decline.
- Experts anticipate that just over one in 10 (13%) of mid-sized plan sponsors will change retirement plan recordkeepers annually, which would be a marked increase from today’s estimated 5% to 10%, an indication that due diligence activity may increase significantly.
- Most experts agree that complete disclosure of fees is on the horizon and that additional disclosure requirements will make fees a more critical factor in selecting a plan provider.
- Automatic plan features, experts agree, is one way employers will help ensure that employees have adequate defined contribution plan coverage. For example 59% expect plan sponsors will have adopted immediate eligibility by 2010; 53% will offer automatic enrollment; 47% will offer immediate vesting, and 35% will offer automatic deferral increases, the experts say.
The study, conducted in the third quarter of 2005, examined trends in mid-to-large-sized retirement plans – plans with $25 million to $1 billion in assets in 2005. Forty-two retirement plan experts from 32 organizations answered the 169-question modified Delphi survey, according to the news release.