Although many defined contribution participants say they want their plans to offer auto escalation, very few participants take advantage of the feature, according to a new survey by Cogent Research.
Among DC plans with more than 1,000 employees, Cogent researchers found that although 51% of participants said they wanted auto escalation and 48% of plans offered it, only 19% of participants are enrolled in it, said Christy White, a principal at Cogent, in an interview.
“When we see that kind of discrepancy, it means there's a lack of awareness on the part of the participants or the way the plan is structured,” Ms. White said. These plans aren't promoting the value of auto escalation adequately, she added.
When Cogent looked at a broader group of plans — from those with more than 1,000 participants to those with fewer than 25 employees — it found that 49% of participants wanted auto escalation, but only 18% participated.
Among the smallest plans, 53% of participants said they wanted auto escalation, but only 13% of these plans with fewer than 25 employees offered it, Ms. White said.
The Cogent survey, published Monday, covered 4,926 DC plan participants — most are in 401(k) plans — via an Internet-based survey in October and November.