Ease-of-Use Features Lower the Savings Barrier

When it comes to helping your employees save for retirement, more can always be done to help move them from inertia to action. Yet no single magic bullet exists for getting them to save. That’s why it’s vital for barriers to participating in workplace retirement plans be lowered and that plan features be easy to use.

Here’s the good news: according to Deloitte’s most recent Defined Contribution Benchmarking Survey, plan sponsors have been taking notice, and their emphasis on ease of use has been paying off. Employee contribution rates and account balances have been on the rise thanks to features like auto-enrollment and auto-escalate contributions, as well as less stringent service requirements for plan entry and immediate matching contributions.

Moving beyond the employer match

According to the Deloitte survey, 93 percent of plan sponsors offer a matching or profit-sharing contribution, and 41 percent cite the match as the primary reason employees participate. But plan sponsors recognize that additional strategies to boost plan health are gaining traction:

• 66 percent of plans offer auto-enrollment, up significantly from 55 percent in 2014.
  
  
• 19 percent of plan sponsors indicate that auto-enrollment is the primary reason their employees participate in their plans (up from 13 percent in 2014).
  
  
• 66 percent of plan sponsors report that auto-enrollment has had a positive impact on deferrals, participation (88 percent), and participant awareness (64 percent).
  
  
• 74 percent of responding plan sponsors offer an immediate match—up from 62 percent in 2014—and 43 percent offer full vesting in the match (up from 32 percent in 2014).
  
  
• 66 percent indicate that there are no service requirements for plan entry, and 43 percent of plans immediately vest the matching contributions (up from 32 percent in 2014).
  
  

The signs are clear: a host of enhancements have fueled positive developments in plan engagement. But are your employees enjoying a similar upward trajectory?

Regardless of past successes, plan sponsors should continue updating their plan design strategies to help participants meet retirement income objectives. Talk with your service providers periodically to review your plans’ features. Be sure that the features offered are in line with your plan goals and workplace demographics.