Administration

Helping Retirement Plan Participants Get the Full Company Match

By Rebecca Moore editors@plansponsor.com | August 04, 2017
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Workman adds, “We see truly remarkable results that come with best-in-class plan design. The combination of automatic enrollment and auto-escalation make it easy for people to make solid financial choices, which ultimately can lead to life-changing savings over time. Overwhelmingly, we see people stick with the plan when their decisions are automated.”

According to Murphy, 75% of plan sponsors use automatic deferral escalation, where employees can opt in to auto-escalate. There’s also a trend of employers automatically enrolling employees into auto-escalation. “That number has gone from about 11% five years ago to about 16% now,” she says. “Employers recognize inertia—that people don’t tend to review their savings each year.”

Financial wellness programs can also help. “Many times employees say they just can’t afford to save more, but if plan sponsors and providers help with other financial decisions—a plan for paying down debt, knowing know how much they can afford for a home or car, budgeting—we hope to get them in a better spot to contribute to their retirement accounts.”

Workman concludes, “The more plan sponsors can do to make it easy for their employees, the better off [employees will] be financially.”

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