Only 33% of Americans are comfortable with their retirement readiness level.
Tag: automatic enrollment
More are using automatic plan features, fiduciary advisers and investment policy statements, PSCA finds.
Many participants see the match percentage as a suggestion for how much to save; the majority of participants support automatic plan features; and even participants who are hands-on with investing like TDFs, J.P. Morgan found.
EBRI says that if the Automatic Retirement Plan Act of 2017 was combined with auto-portability, the retirement savings shortfall of $4.13 trillion would be reduced by $932 billion, or 22.6%.
A survey finds many small employers do not offer employees a retirement plan, and few employers that offer retirement plans extend eligibility to part-time workers.
The percentage of employers that default participants at a 6% deferral rate or higher more than doubled in the past decade to 19%, an analysis from Fidelity finds.
Most retirement plan participants would like savings and investing guidance, a survey finds.
Preparing participants financially to be able to retire beat out reducing plan costs as plan sponsors' top concern in this year's Fidelity Investments Plan Sponsor Attitudes Study.
While automatic enrollment generates positive effects, a report argues how these results are counterweighed by pre-retirement withdrawals.
In conclusion, IZA says, “the data do not support the idea that presenting optional 401(k) plan information in a simpler, more compact way will improve employees’ retirement planning choices. However, we did find that financial literacy was positively associated with better choices."
They are on track to replace 75% of their income, compared to 64% for Americans overall.
“We continue to see the significant impact plan design and financial wellness programs have on participant behavior, as evidenced by the increase in both participation and deferral rates and decrease in loan usage,” says Aimee DeCamillo, head of T. Rowe Price Retirement Plan Services.
When constructing their own retirement portfolio, about 10% of participants still hold extreme allocations—either 0% or 100% equities.
Those who are contributing less than 3% to a retirement plan are on track to replace 59% of their income in retirement, whereas those who contribute 10% or more are on track to replace 128% of their income, an analysis from Empower found.
DC plan consultants surveyed by PIMCO offer suggestions for helping retirees with income, core investment menu design and other DC plan features.
Peg Knox, chief operating officer of DCIIA, points to both the coverage gap and retirement income adequacy as being top of mind; there is also a strong fee litigation focus, given how near and dear this topic is to both plan sponsors and service providers.
The state of South Dakota has experienced good results since implementing automatic enrollment and automatic deferral escalation in its 457(b) plan.
Employer contributions and loans are also prevalent, a Brightscope/ICI report says.
Defaults have a powerful effect on retirement savings behavior, according to the TIAA Institute.
With concerns about retirement readiness growing, sponsors are turning to automatic features, increasing their contributions, streamlining their investment menus and improving fee transparency.