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Retirement Made Simpler News
January 29, 2010
Each issue of Retirement Made Simpler News delivers important news, research, updates and more to your inbox. Meet the Organizations
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In the News
How Automatic Enrollment Affects 401(k) Match
Companies with an eye on their bottom line might reduce their 401(k) match to keep benefit costs the same as they were before all employees were automatically enrolled. A new Employee Benefit Research Institute study that will be released in February that should quell that worry. "Our recent analysis of plan-specific data shows that, at least among large 401(k) plans, plan sponsors actually increased the generosity of their contribution rates," says Jack VanDerhei, EBRI research director and author of the report. Some key findings: - The average 401(k) match was 4.32 percent of pay in 2009, up from 4 percent in 2005.
- Among companies that froze their traditional pensions, the 401(k) match was increased by 1.15 percent of pay. And employers that closed their pensions to new employees boosted the 401(k) match by .66 percent of compensation.
US News and World Report
Ten Resolutions for DC Plan Sponsors
Mercer has published a “10 for 2010” checklist of resolutions defined contribution plan sponsors should make in the New Year. Here’s Resolution Number Five: - Take steps to improve participant savings. Targeted communications, automated plan features and persistence have proven effective in getting employees on track towards adequate retirement savings. Make sure employees have access to all available tools and options, including a well-communicated Roth feature, which could benefit younger participants, those anticipating higher future tax rates and those impacted by IRS or plan limits.
More resolutions from Mercer
New Proposals for Retirement
In his State of the Union speech, the President pushed for employers to allow for automatic direct-deposit individual retirement accounts, or IRAs, for workers who don’t currently have access to existing retirement plans. These initiatives would have a positive effect on the savings rate, says Brigitte Madrian, a professor of public policy and corporate management at Harvard University’s Kennedy School of Government. They would increase the number of lower- and middle-class workers who participate in a retirement savings plan and significantly increase the subsidies that low- and moderate-income workers receive. Smart Money
 Join America Saves Week
The vast majority of employers want to do what’s best for all their employees. America Saves Week.org offers many tools on a wide variety of savings topics your employees can use. America Saves Week
Want News about Automatic 401(k)s and more? Visit the RMS Media Stream
Research and Resources
SHRM Poll: Helping Employees Manage Their Financial Resources
Nearly two-thirds of companies provide some type of financial education resources for employees. This poll presents data on how companies are assisting their employees with financial education resources and tools, the obstacles faced and the reasons why some organizations are not providing financial education resources to employees are also explored. Poll results include: - An inability to save for the future was cited as the primary personal finance concern of polled companies’ employees (36%), followed by "making ends meet" (33%)
- 57% offer voluntary seminars during work hours using outside speakers
- 33% of companies provide education on financial topics beyond employer-specific benefits and retirement
View PowerPoint
Investor Resources on RetirementMadeSimpler.org
Help your employees make the right decisions about saving for retirement. These tools found on the RetirementMadeSimpler Web site can help: - AARP’s Retirement Quiz
- FINRA's Investor Knowledge Quiz
- Mission Retirement
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