More than two-fifths (43 per cent) of U.S. defined contribution pension plan sponsors say their plan offers automatic escalation, up from 21 per cent in 2013, according to a new survey by J.P. Morgan Asset Management.
The survey, which polled more than 700 employers, found nearly two-thirds (61 per cent) said they take a proactive approach to plan design in order to drive stronger outcomes for plan members. However, nearly half (47 per cent) of respondents said they choose to not offer auto-enrolment in their plan.
As well, 60 per cent of plan sponsors said they offer a target-date fund and, among plan sponsors with a qualified default investment alternative, 76 per cent said it’s a series of target-date funds.
Among all plan sponsors, the most frequently reported investment menu changes were the addition of an option designed to generate income for retirees (45 per cent) and a reduction of the number of investment options (35 per cent).
Ninety per cent of respondents said they strongly or somewhat agree it’s important to offer investments that help plan members generate income in retirement. Three-quarters (75 per cent) said they’re extremely or very confident their plan members have an appropriate asset allocation.
The majority (85 per cent) of employers said they feel a strong sense of responsibility for employee financial wellness, up from 59 per cent in 2013. Two-fifths (40 per cent) said they offer programs like emergency savings benefits, one-on-one financial coaching and/or debt management assistance, while a quarter (25 per cent) said they offer student loan debt assistance.