Financial Wellness: Employers Enhance DC Retirement Plans to Improve Employees’ Financial Security

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With concerns mounting that employees aren’t saving enough for retirement, U.S. employers are making significant enhancements to their defined contribution (DC) plans, now considered the main retirement savings vehicle for most working Americans, according to a survey by Willis Towers Watson, a global advisory, broking, and solutions company.

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The survey found more employers are adding “automatic” and Roth design features to their 401(k) plans, boosting employer contributions, streamlining investment choices, and improving fee transparency.

“Helping employees with their long-term financial security has emerged as a very high priority for employers,” said Tammy Hughes, senior retirement consultant, Willis Towers Watson—in a press release. “With most employers now offering a DC plan as the primary retirement savings vehicle, they have become very focused on how to improve their plans and deliver better outcomes to participants. The enhancements they are making should go a long way toward encouraging greater participant savings as well as wiser investment decisions.”

The survey found more companies are adopting automatic features to their DC plans. Nearly three in four respondents (73%) now automatically enroll new participants, compared with 68% in 2014 and 52% in 2009. Additionally, 60% of respondents provide an auto-escalation feature, up from 54% in 2014. These automatic features

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