The use of auto escalation as a default feature in defined contribution plans has increased substantially since 2010, according to NEPC's annual Defined Contribution and Fee Survey.
The survey found that 48% of plans that adopted an automatic-escalation feature into their plan designs offered it as an opt-out feature, a significant change from 2010 when 72% of plans that offered auto escalation did so on an opt-in basis.
Overall, plan sponsors are widely adopting auto features, with 68% of plans offering auto enrollment and 53% offering auto escalation, according to the study.
Corporate plans, however, are stronger adopters of auto features than health-care plans. More than 3 in 4 corporate sponsors (76%) use auto enrollment compared with 54% of health-care plans that do. There's an even greater disparity in the use of auto-escalation, with 65% of corporate plans auto-escalating participant contributions compared with 25% of health-care plans that do.
"Americans simply haven't saved enough for retirement, which is motivating many plan sponsors to reassess plan design, menu options and distribution features to create meaningful solutions," Ross Bremen, partner at NEPC, said in a news release.
The survey, which was conducted online in October, represented 121 corporate, health-care and not-for-profit plans with $135 billion in aggregate assets.