Tag: automatic enrollment

As evidenced by Wednesday morning’s House Education and Labor Committee hearing, retirement security is a topic where strong bipartisan consensus is possible, even in an intensely divided Congress.

The markup hearing, punctuated by a unanimous vote to advance the legislation, demonstrated that retirement security issues are capable of bringing together members of Congress who don’t agree on much else.

“They are hiring advisers to understand how well their plan is functioning and how to improve it,” Jordan Burgess, with Fidelity Institutional Asset Management, tells PLANADVISER.

Plan sponsors that fully automate their plans are more likely than others to believe their workers are on the path towards a financially secure retirement, J.P. Morgan found.

At year-end 2018, 66% of new plan entrants were enrolled via automatic enrollment.

Fidelity analyzed the balances of those who remained invested in their 401(k) in the decade following the Great Recession of 2008 and found that the balances went from $52,600 to $297,700.

Recent research reports suggest average employee tenure in the U.S. has trended downward; retirement industry experts agree this fact should inform plan design discussions and participant-level services.

While the UK's requirement to automatically enroll all workers into a retirement plan showed a potential for a big boost in participation if the U.S. were to adopt a similar policy, finding about re-enrollment did not show a big boost.

The request regards information collection for Revenue Ruling 2000-35, which describes certain criteria that must be met before an employee's compensation can be reduced and contributed to an employee's section 403(b) plan in the absence of an affirmative election by the employee.

With participants not panicking in Q4 2018 and the longer term trends resulting from automatic plan features, Fidelity Investments finds an overall improvement in average participant savings and account balances.

A bipartisan pair of Senators introduced another retirement-focused piece of lame duck legislation, including more than 50 provisions aimed at increasing savings in DC plans and IRAs.

While automatic enrollment gets participants into plans, a sizable segment are starting their average contributions at a minimum 3.3% rate and failing to take any additional action to increase that, according to J.P. Morgan Asset Management.

More plan sponsors are making Roth contributions available, automatic enrollment default deferral percentages are increasing, and company match formulas are becoming more generous.

Janus Henderson research suggests the vast majority of auto-enrollment programs fund only pre-tax accounts; this is despite the fact that for younger, lower-income employees, funding a Roth account may be a more appropriate long-term option.