Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. DEFINED CONTRIBUTION
October 24, 2017 01:00 AM

Use of auto enrollment leaps, survey finds

Robert Steyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    eranyardeni - stock.adobe.com

    Auto enrollment surged in popularity among defined contribution plan sponsors, with 68% using this plan design in 2017, according to a survey by Alight Solutions published Tuesday.

    "This was a surprise," Robert Austin, the Charlotte, N.C.-based director of research for Alight Solutions, said in an interview. "We thought we were at a saturation point."

    Alight conducts a survey of plan sponsors — both clients and non-clients — every two years. In each of the previous four surveys, the adoption rate of auto enrollment hovered between 56% and 59% of respondents. By contrast, in 2007, only 34% of plans offered auto enrollment.

    "Companies are saying 'Why aren't we doing this?' " said Mr. Austin, noting plan managers and corporate executives seem to be overcoming fears that employees might push back against automatic enrollment. As these executives see what their peers are doing, he added, they are becoming more amenable to offering auto-enrollment.

    However, auto enrollment remains overwhelmingly an option offered only to new employees — 88% of plans offering auto-enrollment in the latest survey use this approach.

    Target-date funds are the most popular qualified default investment alternative offered to auto-enrolled participants. This year, 83% of plans that use auto enrollment used this investment option as the QDIA, well ahead of second-place target-risk funds, at 9%.

    Mr. Austin said he was encouraged by the steady rise in higher default contribution rates offered by plans with auto-enrollment, reflecting a realization that participants often need to be nudged to save more. Plans auto-enrolling participants at 6% of annual pay have climbed to 30% in the latest survey representing a five-fold increase from 2007.

    The traditional default rate of 3% of annual pay is still offered by 37% of plans, but that is well down from the 51% in 2007.

    The Alight Solutions survey also found that plans offering auto enrollment and/or auto escalation are raising their auto features targets. This year, for example, 56% of these plans set a target to 10% of annual pay to be subject to auto features. In 2007, only 14% of plans had this 10% auto features pay target.

    The next highest auto features target last year was 6% of annual pay, which was set by 22% of plans vs. 47% of plans with this target in 2007.

    The third largest auto features target this year was 15% of annual pay, which was set by 10% of plans.

    The latest survey covered 333 plan sponsors with aggregate assets of $775 billion in assets and nearly 10 million participants. The online survey was conducted in the spring.

    Related Articles
    DC plan execs can learn something from Mr. Spock and Homer Simpson, keynote spe…
    Being direct with staff to increase participation
    Higher retirement plan contributions needed, conference speakers say
    Finding new ways to engage with participants helping retirement outcomes — conf…
    Rep. Richard Neal introduces two workplace retirement savings bills
    Auto enrollment, escalation on the rise across the board – DCIIA report
    PLSA: DC plans becoming dominant retirement option in U.K.
    Employers, employees diverge on what financial wellness programs should be offe…
    Auto features continue to gain in DC plans – PSCA
    Recommended for You
    parliament 1550_i.jpg
    U.K. considers CDC model for multiemployer plans
    British-Union-Jack-Parliament_i.jpg
    New U.K. regulations allow DC plans to increase illiquid investments
    ONLINE_180109908_AR_0_OXQTDCTVBIGZ.jpg
    Inadvertent error in SECURE 2.0 legislation prevents 401(k) catch-up contributions
    The Institutional Investor's Guide to ESG Investing
    Sponsored Content: The Institutional Investor's Guide to ESG Investing

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    Show Me the Income: Discovering plan sponsor and participant preferences for cr…
    The Future of Infrastructure: Building a Better Tomorrow
    Fulcrum Issues: Equity Returns and Inflation — Choose Your Own Adventure
    What Matters Most in Considering a Private Debt Strategy
    Why pursue direct lending in the core middle market?
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing