PLANSPONSOR - August/September 2018 - 22
COVER STORY
GETTING THEM
BACKon
TRACK
Why treat all new hires like they've never
participated in a DC plan?
IN 2016, employee tenure with an employer, for all wage and salary workers ages 25 and older, was
5.1 years-down from a high of 5.5 years in 2014 and up from the 4.7-year median seen between
1998 and 2002. Even 35 years ago, around the beginning of the 401(k)'s ascendance, the median
tenure was 5.0 years. In other words, historically, most workers have changed jobs many times
during their careers, and all evidence suggests they will continue to do so, according to research
from the Employee Benefit Research Institute (EBRI).
Yet, when it comes to retirement, the defined contribution (DC) plan system is not set up to help
participants maximize their savings over their working lives. Persistent job changes may bring career
growth, but there can also be ramifications, which could include the reduction of the worker's retirement
plan savings rate. Any time an employee switches jobs, he is at risk.
" We're increasingly likely to see participants experience what we call 'auto-decrease,' " says Drew
Carrington, senior vice president, head of institutional DC, at Franklin Templeton Investments in
San Mateo, California. " They start working at a firm, are automatically enrolled at the default contribution
rate and are automatically escalated over time. But when they change jobs, they may start over
at a lower default contribution rate as a result of automatic enrollment. "
For many plan sponsors, the most important part of the Pension Protection Act of 2006 (PPA),
was the state law pre-emption and the safe harbor status offered for automatic design features-
without these, many participants would not have joined their company plan and be amassing retirement
savings although most would have likely chosen to enter the plan, potentially at higher initial
default rates.
Still, there is room for improvement. Automatic plan design reflects a win over inertia, but
what does it do for participants who are not inert?
22 PLANSPONSOR.com August-September 2018
Art by Josh Cochran
B
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PLANSPONSOR - August/September 2018
Table of Contents for the Digital Edition of PLANSPONSOR - August/September 2018
Getting Them Back on Track
2018 PLANSPONSOR National Conference
2018 Participant Survey
2018 Managed Account Buyer's Guide
Fund Change
New Interest in LDI Programs
Another Way to Save
PLANSPONSOR - August/September 2018 - C1
PLANSPONSOR - August/September 2018 - FC1
PLANSPONSOR - August/September 2018 - FC2
PLANSPONSOR - August/September 2018 - C2
PLANSPONSOR - August/September 2018 - 1
PLANSPONSOR - August/September 2018 - 2
PLANSPONSOR - August/September 2018 - 3
PLANSPONSOR - August/September 2018 - 4
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PLANSPONSOR - August/September 2018 - 19
PLANSPONSOR - August/September 2018 - 20
PLANSPONSOR - August/September 2018 - 21
PLANSPONSOR - August/September 2018 - Getting Them Back on Track
PLANSPONSOR - August/September 2018 - 23
PLANSPONSOR - August/September 2018 - 24
PLANSPONSOR - August/September 2018 - 25
PLANSPONSOR - August/September 2018 - 26
PLANSPONSOR - August/September 2018 - 27
PLANSPONSOR - August/September 2018 - 2018 PLANSPONSOR National Conference
PLANSPONSOR - August/September 2018 - 29
PLANSPONSOR - August/September 2018 - 30
PLANSPONSOR - August/September 2018 - 31
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PLANSPONSOR - August/September 2018 - 36
PLANSPONSOR - August/September 2018 - 37
PLANSPONSOR - August/September 2018 - 2018 Participant Survey
PLANSPONSOR - August/September 2018 - 39
PLANSPONSOR - August/September 2018 - 40
PLANSPONSOR - August/September 2018 - 41
PLANSPONSOR - August/September 2018 - 2018 Managed Account Buyer's Guide
PLANSPONSOR - August/September 2018 - 43
PLANSPONSOR - August/September 2018 - 44
PLANSPONSOR - August/September 2018 - 45
PLANSPONSOR - August/September 2018 - 46
PLANSPONSOR - August/September 2018 - 47
PLANSPONSOR - August/September 2018 - Fund Change
PLANSPONSOR - August/September 2018 - 49
PLANSPONSOR - August/September 2018 - New Interest in LDI Programs
PLANSPONSOR - August/September 2018 - 51
PLANSPONSOR - August/September 2018 - Another Way to Save
PLANSPONSOR - August/September 2018 - 53
PLANSPONSOR - August/September 2018 - 54
PLANSPONSOR - August/September 2018 - 55
PLANSPONSOR - August/September 2018 - 56
PLANSPONSOR - August/September 2018 - C3
PLANSPONSOR - August/September 2018 - C4
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