Benefits May 18, 2011

The Principal Data Supports Increase in Auto Enroll Default

May 18, 2011 (PLANSPONSOR.com) - "Automatic enrollment is a powerful tool to encourage better retirement savings behavior, but we've found that most plan sponsors tend to set their default at what we believe is an insufficient level," said Barrie Christman, vice president of individual investor services at The Principal.
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According to a press release, client data from The Principal shows that plans with an automatic enrollment feature defaulting at 3% produce an average deferral of 6.3% – lower than the average deferral of 6.8% for plans without an automatic enrollment feature. In contrast, the average deferral is 7.1% for plans that have a 6% default automatic enrollment feature.  

Automatic enrollment significantly boosts participation in retirement plans, the data shows. There was a 20% increase in participation in plans with an automatic-enrollment feature compared to participation in plans without the feature. In addition, automatic enrollment at 6% only increased opt outs by 4 percentage points (19%) over the 3% automatic-enrollment deferral rate (15%).  

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For plans with an employer match contribution, nearly twice as many participants (61%) reach an overall savings rate greater than 11% when their employers’ plan defaulted them at 6% rather than 3% (32%). Twenty-eight percent of participants in plans with a stated employer match but without automatic enrollment save 11% or more.   

Christman added that implementing an auto-escalate program, which automatically increases participants’ deferral amounts by certain percentages over set amounts of time, along with automatic enrollment is another way for plan sponsors to help participants reach their retirement savings goals. “Our data supports coupling the two programs to achieve the most successful plan design, especially if the automatic enrollment default rate is lower,” she said in the announcement.
Products May 18, 2011

ACS Expands Medicare Advocate Solution

May 18, 2011 (PLANSPONSOR.com) - Affiliated Computer Services, Inc. (ACS), a Xerox company, announced the expansion of the My Medicare Advocate network following the participation of national health benefits companies, Humana Inc. and WellPoint, Inc.
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As the anchor companies for My Medicare Advocate, Humana and WellPoint affiliated health plans provide their group and individual Medicare insurance products to participants in the network. With more than 20 additional carriers, their plans provide retirees in all 50 states and Puerto Rico with access to lists of their Medicare plans.  

ACS also announced it is teaming up with DestinationRx, Inc. to provide Medicare plan comparison and enrollment tools, and Connextions Inc. to offer retiree medical call center services for My Medicare Advocate.    

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According to the announcement, My Medicare Advocate helps retirees select the most appropriate Medicare coverage for their individual needs by combining call center representatives, a Web portal with user-friendly decision tools, and a range of written communication materials, including brochures and enrollment guides. It is a complete package of services, which frees employers from handling complex retiree medical enrollment and administration issues, ACS said.  

For more information, visit http://www.mymedicareadvocate.com.

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