PLANSPONSOR - October/November 2021 - 36
PLAN BENCHMARKING | AUTOMATIC FEATURES
Retirement, by Auto-Pilot
Strategies to improve outcomes even when auto-enrollment is in place
S
ince the enactment of the Pension
Protection Act of 2006 (PPA), automatic
features have become common
within defined contribution (DC)
plans. The main trio of auto-features-
auto-enrollment, auto-escalation and
qualified default investment alternatives
(QDIAs)-alone helped increase DC
assets from $3 trillion in 2007 to nearly
$10 trillion in 2020, according to Statista.
Yet, despite widespread recognition
that such features can help improve
participant outcomes, many plans have
yet to adopt them. Seventy-six percent of
plans with less than $10 million in plan
assets still do not use auto-enrollment, nor
do 47% of plans with $10 million through
$50 million, 33% of plans with more than
$50 million through $200 million, or 14%
of plans with $200 million-plus in assets,
according to the 2021 PLANSPONSOR
DC Plan Benchmarking Survey (see " Lay
of the Land, " page 22).
For workers, the automated plan
features can be a benefit: 84% of those
polled by Principal Financial Group who
were automatically enrolled into their
workplace plan said they are glad their
savings was jump-started. In fact, they said
auto-enrollment got them on the retirement
savings path at an earlier age than if
they had made the decision on their own.
Auto-enrollment alone, however,
might provide participants with too little
support to help them reach their goals. In
Vanguard's " Automatic Enrollment: The
36 PLANSPONSOR.COM October - November 2021 Art by Kyle Ellingson
Power of the Default " research, the firm
found that in plans with auto-enrollment
but no automatic increase, after three
years, one-third of participants had overridden
their employer's default and raised
their own deferral rate; one-quarter had
overridden their employer's rate, raised
their deferral and signed up for auto-escalation.
Among the surveyed employers that
use auto-enrollment in their plan design,
21% defer their employees' salary at 6%.
Experts note that participants should
be targeting a total contribution of 10% to
15% of salary annually.
Vanguard studied 813,918 eligible
new hires in 520 plans and found that
70% of their plans pair auto-enrollment
with auto-escalation. Among the plans
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PLANSPONSOR - October/November 2021
Table of Contents for the Digital Edition of PLANSPONSOR - October/November 2021
INSIGHTS
INDUSTRY ANALYSIS
RULES & REGULATIONS
UPFRONT
To Attract and Retain
2021 DC Plan Benchmarking Survey
Investment Appraisal
The Evergreen Discussion
Retirement, by Auto-Pilot
FIDUCIARY FORUM A Useful Gauge
INSIDE ANGLE ESG for Fiduciaries
PLAN PROFILE Picture of Health
PLANSPONSOR - October/November 2021 - Cover1
PLANSPONSOR - October/November 2021 - Cover2
PLANSPONSOR - October/November 2021 - 1
PLANSPONSOR - October/November 2021 - 2
PLANSPONSOR - October/November 2021 - 3
PLANSPONSOR - October/November 2021 - INSIGHTS
PLANSPONSOR - October/November 2021 - 5
PLANSPONSOR - October/November 2021 - INDUSTRY ANALYSIS
PLANSPONSOR - October/November 2021 - 7
PLANSPONSOR - October/November 2021 - RULES & REGULATIONS
PLANSPONSOR - October/November 2021 - 9
PLANSPONSOR - October/November 2021 - 10
PLANSPONSOR - October/November 2021 - 11
PLANSPONSOR - October/November 2021 - UPFRONT
PLANSPONSOR - October/November 2021 - 13
PLANSPONSOR - October/November 2021 - 14
PLANSPONSOR - October/November 2021 - 15
PLANSPONSOR - October/November 2021 - 16
PLANSPONSOR - October/November 2021 - 17
PLANSPONSOR - October/November 2021 - To Attract and Retain
PLANSPONSOR - October/November 2021 - 19
PLANSPONSOR - October/November 2021 - 20
PLANSPONSOR - October/November 2021 - 21
PLANSPONSOR - October/November 2021 - 2021 DC Plan Benchmarking Survey
PLANSPONSOR - October/November 2021 - 23
PLANSPONSOR - October/November 2021 - 24
PLANSPONSOR - October/November 2021 - 25
PLANSPONSOR - October/November 2021 - 26
PLANSPONSOR - October/November 2021 - 27
PLANSPONSOR - October/November 2021 - 28
PLANSPONSOR - October/November 2021 - 29
PLANSPONSOR - October/November 2021 - Investment Appraisal
PLANSPONSOR - October/November 2021 - 31
PLANSPONSOR - October/November 2021 - 32
PLANSPONSOR - October/November 2021 - 33
PLANSPONSOR - October/November 2021 - The Evergreen Discussion
PLANSPONSOR - October/November 2021 - 35
PLANSPONSOR - October/November 2021 - Retirement, by Auto-Pilot
PLANSPONSOR - October/November 2021 - 37
PLANSPONSOR - October/November 2021 - FIDUCIARY FORUM A Useful Gauge
PLANSPONSOR - October/November 2021 - INSIDE ANGLE ESG for Fiduciaries
PLANSPONSOR - October/November 2021 - PLAN PROFILE Picture of Health
PLANSPONSOR - October/November 2021 - Cover3
PLANSPONSOR - October/November 2021 - Cover4
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