What is particularly encouraging is that 37% of plans on T. Rowe Price’s platform automatically enroll their participants at a 6% or higher deferral rate.
“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.
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.
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.
Willis Towers Watson offers nine actions for DC plan advisers to help their clients mitigate risks in 2019.
In addition, a person invested in a stable value fund versus someone invested in a target-date fund could end up with a balance as much as 59% lower, BlackRock says.
Monthly expenses are their second concern, The Standard found in a survey.
However, only 33% are confident about their retirement readiness.
Their use of an adviser acting as a plan fiduciary has increased by 40% in the past four years, according to the Plan Sponsor Council of America.
If combined with the Automatic Retirement Plan Act of 2017, the retirement savings shortfall would be reduced by $932 billion, or 22.6%, according to EBRI.
Fifty-two percent think they will be able to retire at their ideal retirement age, and 52% say they either somewhat or strongly agree that their savings will last throughout their lifetime.
To help employees achieve their savings goals, 82% of sponsors are making changes to plan design, and 83% are updating their investment menus.