Automation is a hot topic in defined-contribution plans, but while there has been a steady increase in the adoption of features such as automatic re-enrollment and other automatic plan features, they still haven't reached ubiquity and might never get there.
That is one conclusion that can be found in the Callan Investment Institute's "2015 Defined Contribution Trends" study, based on a survey last fall that included 144 plan sponsors at large and mega 401(k) plans, as well as some government and not-for-profit plans.
The study found that while 61.7 percent of plans now offer automatic enrollment, it's still not the norm. Auto-enrollment is primarily targeted at new hires, and those who do not implement it cite it as being a low priority, too expensive or unnecessary.
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Among those who offer automatic enrollment, 13 percent do not offer it to all of their employees. Furthermore, only a third of plans offer both automatic enrollment and automatic escalation.
Also read: New 401(k) plan features alone aren't enough
Even with the increased numbers of plans offering automatic enrollment over the last four years, only 12.8 percent said that they plan to implement the feature in the future. However, the majority of those polled who do offer the feature do not plan to get rid of it.
The survey also noted employers' "muted" response to various legislative and regulatory developments in play at the time respondents were polled.
Despite rulings by the SEC on money-market regulations, Treasury department regulations regarding longevity annuities and a U.S. Supreme Court ruling stating that presumption of prudence cannot be used as a defense in defined contribution stock-drop cases, few plan sponsors have scrambled to make immediate changes.
Most sponsors affected are waiting to determine what the actual implications of the regulations and rulings are before making any changes, adopting what Callen called a "wait-and-see" approach.
However, compliance writ-large is certainly not off the radar of those sponsors polled.
It was one of the main areas of focus over the next 12 months for respondents, alongside participant communication – rated the most important area of focus moving forward by 30.6 percent of those polled – and fund/manager due diligence, rated most important by 33.3 percent of those polled, and plan fees, rated most important by 39.2 percent of those polled.
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