Automatic features are being incorporated into more and more defined contribution plans, but participant education has not slowed, said plan executives and providers Monday.
With features like auto enrollment in place, education efforts have turned to raising participant contribution levels, said Molly Rudd, senior retirement plans administrator at Weyerhaeuser Co., speaking on the panel “Does Automation Trump Education” at Pensions & Investments’ West Coast Defined Contribution Conference in San Francisco.
In fact, the company might look at whether auto-enrolling new employees at the current 3% of salary with a one percentage point annual increase is high enough, Ms. Rudd said.
With auto features in place, participant communication can become more targeted and segmented, added Donna McFarland, senior vice president and chief marketing officer at Lincoln Financial Group, speaking on the same panel.
At Franklin Templeton, for instance, e-mails directed to a particular group of employees, like new hires, seem to have greater pickup than mass e-mails sent to all employees, said Meenu Natarajan, retirement programs manager for Franklin Templeton Investments, speaking on the same panel.
Ms. Natarajan added that redesigning the company’s match formula to 75 cents on the dollar for its roughly $1.25 billion 401(k) plan has encouraged higher employee contribution rates.