Participant contributions to defined contribution plans will nearly double to $204 billion in 2011 from $103 billion now because of the automatic enrollment and deferral increase provisions of the Pension Protection Act, according to a new report by TowerGroup Research. Without auto enrollment, contributions would have increased only to $109 billion in 2011, the report said.
The report also found that allocations to target-date or lifestyle default options will grow to 56% by 2011, from 11% now. TowerGroup also reported that only 11% of U.S. employees will be covered exclusively by a defined benefit plan by 2011, 76% only by a DC plan and 13% by both.
The data came from separate DB and DC reports conducted by TowerGroup.