The Defined Contribution Institutional Investment Association is exhorting sponsors to improve their plans by greater use of best practices rather than hoping for more government guidance.
"The current DC system can do better even without additional legislative or regulatory action," the association said in a report to be published July 24.
Encouraging more and earlier savings by retirement plan participants "doesn't need a lot of legislative or regulatory involvement if sponsors are willing to take advantage" of existing opportunities, said Lori Lucas, one of three principal authors of the DCIIA report, called "Design Matters."
"There's no one silver bullet, but the system has a lot of tools that are underutilized," said Ms. Lucas, the Chicago-based executive vice president and defined contribution practice leader at Callan Associates.
The DCIIA report said some legislators have proposed promoting greater defaults under automatic enrollment and automatic escalation through laws to change existing safe harbors or to offer harbors. "DCIIA believes, however, that current regulation is supportive of robust defaults," the report said.
"There is no regulatory reason not to implement robust defaults unless the DC plan is among the small group of plans that adheres to the Pension Protection Act's non-discrimination testing safe harbor," the report added.
The DCIIA report defined "robust" as an initial auto-enrollment default above the common practice of 3% of a participant's salary, an auto-escalation rate of 1% to 2% of salary per year and a cap on total auto features of 15% of annual salary per year.
The report cited a Callan Associates survey of DC plans last year that said the median auto-enrollment deferral was 3% of annual pay and the average was 4%. DCIIA recommends a deferral of at least 6%.
Citing the same Callan survey, the DCIIA report said the median and most common cap for auto features is 10%, up from 6% in 2014. Despite the gain, there's room for improvement, the report said.
DCIIA also recommended that plans conduct auto-enrollment sweeps to get non-contributing employees to save. Ms. Lucas conceded the auto-enrollment sweep can be "challenging" because sponsors might fear pushback from employees "who are used to receiving a routine paycheck" and might object to more money being moved into their retirement accounts. Executives also might be worried about perceived extra costs.