J.P. Morgan makes recommendations for plan design and TDFs based on savings and withdrawal behaviors it analyzed.
Tag: automatic enrollment
The availability of Roth contributions has doubled in the last decade, and more plan sponsors are using a default deferral rate with automatic enrollment that is higher than 3%, a Plan Sponsor Council of America survey found.
Now that automatic and default features have gained widespread acceptance in DC retirement plans, it may be time to consider additional steps to further enhance participant retirement preparedness.
Willis Towers Watson offers nine actions for DC plan sponsors to mitigate risks in 2019.
Setting defaults too low, choosing the wrong default investment and offering company stock as an investment option could result in unintended consequences, BlackRock found.
In addition, to help employees reduce their debt stress and maximize their retirement plan savings, more employers are developing financial wellbeing initiatives, Arthur J. Gallagher & Co. found.
The Standard recommends automatic plan features as well as managed accounts.
Only 33% of Americans are comfortable with their retirement readiness level.
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.