Products February 28, 2011

Principal Reports 401(k) Participants Using Online Tool Defer More

February 28, 2011 (PLANSPONSOR.com) - Retirement plan participants who have completed My Principal Edge Milestones, an interactive tool available on The Principal’s Web site, are saving an average of 39% more for retirement than those who have not used the tool, according to the firm.
Reported by

Nearly 94,000 participants covered by 401(k) plans through The Principal have completed the online tool, which analyzes retirement savings needs and provides a personalized guide of actions to help participants meet a specified retirement savings goal. The average deferral rate for a sample group of Milestones users is 2.5 percentage points higher (8.9%) than those who have not completed Milestones (6.4%).  

According to a press release, the most frequent actions taken after completing Milestones include increasing deferrals, adjusting asset allocation and rebalancing accounts.   

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

In 2010, nearly 30,000 participants used Milestones for the first time. Of a sample group of those participants: 

  • 46% either started deferring or increased their deferral amount; 
  • Participants who started deferring for the first time did so at a 7% higher rate (7.3%) than the overall average deferral rate for all participants covered by a 401(k) plan through The Principal (6.8%); 
  • Participants who bumped up their deferral after completing Milestones increased it at a rate of 56% (from 7% deferral to 10.9% deferral). 

 

Further analysis of participants with a known employer match who completed Milestones shows nearly 57% have an annual contribution of more than 11% toward retirement, including employer match.

«