Products August 2, 2016

DST Systems Streamlines Enrollment on TRAC Platform

Enhancements to the current enrollment platform offer an even faster pathway for hesitant or time-pressed employees to start saving in their company’s retirement plan, the firm says. 
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DST Systems announced the implementation of a streamlined enrollment functionality on its TRAC recordkeeping platform that allows eligible plan participants to enroll in their retirement plan in as little as two clicks.

“This enhancement to the current enrollment platform offers an even faster pathway for hesitant or time-pressed employees, allowing them to quickly navigate enrollment, deferral, and investment selections in the plan,” the firm explains. “The new streamlined enrollment can be leveraged in both the traditional and mobile versions of the DST TRAC web applications.”

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DST anticipates the simplified enrollment process will help improve plan participation and increase assets under management for retirement plans.

John Geli, president of DST Retirement Solutions, adds the new enhancement enables the firm to “capture potential plan participants, especially Millennials, who know they want to be in a plan, but want an easy process to complete enrollment. We see this added capability as an exciting and valuable new path to retirement readiness for participants, plan sponsors and advisers.”

Research regarding the enrollment experience was conducted in association with DST and the Oculus Partners, LLC, the firm explains. The research included interviews with actual plan participants to identify requirements for the new streamlined enrollment.

The findings concluded that a major obstacle to enrollment was the perception that the process could be intimidating and time consuming, Geli concludes. During the design process, DST used the insights gained from the research and interviews to improve overall customer experience by developing this new streamlined enrollment process.

More information is online here. 

Data & Research August 2, 2016

Fidelity Reports Millennial 401(k) Account Balances at Record Levels

The average 401(k) account balance for its Millennial customers rose to a record $92,900 at the end of this year's second quarter, according to Fidelity's latest research. 

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The average 401(k) account balance for Fidelity customers rose to $88,900 at the end of the second quarter of 2016 signaling an increase of nearly 2% from the end of quarter one, according to the company’s latest retirement savings analysis. The average account balance for its customers’ individual retirement accounts (IRA)s increased to $89,700 at the end of Q2 2016. That figure increased from $89,300 at the end of Q1 2016.

The analysis also found that the average 401(k) balances of Millennial account holders rose to record levels. The average balance for Millennials who have been continuously active in their 401(k) plans for 10 years reached a record $92,900 at the end of Q2 2016, an increase of nearly 10% from $84,700 one year ago, Fidelity reported. The overall balance for long-term savers reached $241,300 at the end of Q2 2016, up from $231,500 one year ago.

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Despite this growth, however, retirement account balances for Q2 2016 decreased when compared to the levels reported in Q2 2015. The average 401(k) balance at the end of Q2 2016 fell 2.5% from Q1 2015. The average IRA balance at the end of Q2 2016 was 7% lower than it was at the closing of Q2 2015.

The company’s findings also revealed that more people are embracing digital tools when it comes to managing their retirement savings. More than 400,000 people tapped Fidelity’s online guidance for information about a wide range of financial topics including increasing savings, establishing emergency funds, and taking advantage of Social Security benefits. In addition, more than 225,000 people completed Fidelity’s interactive money checkup which analyzes an individual’s financial needs and offers guidance. 

The percentage of Fidelity customers with all of their 401(k) assets in a target-date fund or managed account topped 45% at the end of Q2. These investors were less likely to react to market swings and economic events—among savers with all of their 401(k) savings in a target-date fund, only 1% made an investment change within their 401(k) over the past 12 months, compared to 13% of 401(k) investors taking a “do it yourself” approach to retirement savings.  

“Most retirement savers are accustomed to market volatility, but the swings in the second quarter were especially dramatic, including a 600-point drop followed by a nearly 800 point increase,” says Doug Fisher, senior vice president of Workplace Investing at Fidelity Investments. “It can be tempting for investors to have a knee-jerk reaction to market volatility, so it’s encouraging that more people are tapping professional guidance to help keep their retirement savings and investing on track.”

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