Making it easier for employees to save for retirement through plan enhancements has boosted plan participation and savings, but no one plan feature or strategy is enough.
That's according to Deloitte's 14th "Annual Defined Contribution Benchmarking Survey," which found that plan sponsors and providers have upped their game in offerings intended to boost employee engagement and increase savings.
In fact, the number of plans offering step-up contributions rose substantially, from 46 percent or respondents last year to 62 percent in 2015.
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In addition, mobile transaction processing is now available for 59 percent of plans surveyed (up from 52 percent in 2013–14 and 25 percent in 2012).
Yet the average employee participation rate, according to the survey, was 75 percent in 2015, while in 2013–14 it was reported at 77 percent—which the survey calls "consistent."
Plan sponsors view participation as the most valid indicator of plan effectiveness, with 60 percent saying it's the most important, compared with 51 percent in last year's survey.
However, other studies indicate that what sponsors think what sponsors think doesn't necessarily coincide with what participants think—especially when it comes to the most effective strategies to boost participation and savings.
In addition, despite the proliferation of features designed to make more employees save, and save more, average account balances in 2015 were up just under 4 percent, from $95,227 in 2013–14 to $99,011.
This is despite the median actual deferral percentage for non-highly compensated employees increasing to 5.9 percent from last year's 5.2 percent. However, if employees expect to be able to withdraw 4 percent annually to live on, they're still not saving enough.
One way to woo employees into greater participation is a larger match, and that shows in this year's responses. "[N]early all plan sponsors (94 percent) surveyed are offering some form of matching or profit-sharing contribution in their defined contribution plans, with 6 percent increasing the match," the study said, adding, "For the first time in five surveys dating back to 2009, 100 percent of respondent plan sponsors with discretionary matching reported making the matching contributions."
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