Employer contributions and loans are also prevalent, a Brightscope/ICI report says.
Tag: automatic enrollment
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.
In 2016, 40.2% of plan sponsors surveyed by the PSCA used a default rate for auto enrollment greater than 6%.
Empower’s PlanVisualizer aims to create a holistic view of a client’s retirement plan in its current state, along with the ability to model how changes to key design elements can potentially affect participant preparedness.
All employees would have 6% of their income contributed to a workplace retirement plan and have these contributions automatically escalated each year.
Perhaps since the first five years of their working lives is the time period respondents to an American Century survey have the most regret about saving for retirement, they find automatic retirement plan features important.
Among plans with both automatic enrollment and escalation, 70% have participants saving 10% of more.
Seventy percent of those with less than $45,000 in household income say they cannot afford to save for retirement.
Voya Financial says plan sponsors should not be intimidated about raising default savings rates.