Many workers are faced with the challenge of saving for retirement and are looking to their employers for help. Here is a list of some of the top trends for retirement plans this year:
1. Recalibrating the match to spark more savings
The employer match was originally created to encourage employees to participate in company-sponsored retirement plans. Now employers are trying to stretch their matching contributions in an attempt to get employees to save more.
2. Adopting an auto re-enrollment strategy
Automatic re-enrollment is the act of automatically shifting plan participants’ plan dollars out of their current investments and into the plan’s default option, unless participants opt out of the process. This approach is more frequently being paired with the more traditional auto enrollment and auto escalation strategies. A popular re-enrollment investment option plan sponsors are choosing: target-date funds.
3. Educating employees online
Having to pull employees away from their desks to educate them about their company’s 401(k) plan is cumbersome — not to mention costly, at least from a productivity standpoint. As a result, more employers are switching to an online education system in which employees can access educational info — like short tutorial videos — from home.
4. Adding Roth options
The government’s move to make it easier to convert traditional 401(k) dollars into Roth 401(k) dollars has resulted in more employers offer Roth options.
5. Dumping plan fees onto participants
Upwards of 58% of plan sponsors now require employees to pay direct recordkeeping fees. That figure has been steadily climbing over the past few years from 33% in 2009 to 44% in 2012 to today’s high of 58%.
For assistance with developing or modifying your organization’s retirement plan contact Kellie Boysen at 717-855-5589.