Our latest survey reveals that, although participants are making progress and gaining confidence overall, more work is needed. In a series of three articles, we discuss our findings and the steps plan sponsors can take to further strengthen their plans.
PARTICIPANTS EXPECT EMPLOYERS TO ENCOURAGE THEM TO SAVE
The first article in our three-part series, 2018 Defined Contribution (DC) Plan Participant Survey Findings, reports that, despite continued improvement, too many participants still lack confidence in their ability to save, invest and achieve their retirement goals.1
In response, this article explores participants’ views of the tools plan sponsors are using to help motivate employees to save and save enough—from traditional strategies to innovative automatic plan features.
The good news is, participants generally expect employers to encourage them to save through their defined contribution (DC) plans and to provide a viewpoint on how much to save. Few want their employer to decide their savings rate for them, though that number has increased (EXHIBIT 1).
Our survey indicates that automatic enrollment and automatic contribution escalation—which allow participants to opt out or change their contribution rates—appear to strike the right balance between the encouragement and direction participants need and the autonomy they want.
Motivating participants to save requires a balance between employer encouragement and participant choice
EXHIBIT 1: TO WHAT EXTENT DO YOU AGREE/DISAGREE WITH THE FOLLOWING STATEMENTS? (% RESPONDING “SOMEWHAT AGREE” OR “STRONGLY AGREE”)
Part 1: Understand the state of the participant
Part 1 of our 2018 DC Plan Participant Survey Findings highlights motivating participants to save.
1J.P. Morgan 2018 DC Plan Participant Survey Findings—Part 1: Understand the state of the participant. 2J.P. Morgan 2018 DC Plan Participant Survey Findings—Part 1: Understand the state of the participant. 3J.P. Morgan Plan Sponsor Research 2017; large plans are defined as those with assets of $250 million and above. 4In general, “do it for me” investors are those who prefer to leave most ongoing investment decisions to experienced investment professionals, while “do it yourself” investors prefer a more hands-on approach. See J.P. Morgan 2018 DC Plan Participant Survey Findings-Part 1 for definitions.
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