During Benefits Canada’s annual DC Plan Summit, plan sponsors participated in interactive sessions. They split into small groups and were given questions to discuss. Based on these discussions, moderators later offered their insights and relayed key take-aways.
Jennifer Mayrhofer, manager, group retirement services marketing with Great-West Life shares the best ideas from the question she moderated: Autopilot versus self-pilot: Who should be steering the plan?
Do we create too many obstacles with the number of decisions we have members make, such as enrollment, investment choices and saving? What solutions does auto-enrollment provide and, in particular, what prevents plan sponsors from actually putting this into their plan design? The consensus was that although investment choice can be an obstacle, a streamlined investment menu and appropriate default options can really manage this barrier. However, when it comes to implementing these kinds of solutions it’s obvious that there are roadblocks. No. 1 is cost; combining mandatory enrollment with matching contributions all at the same time is not likely feasible in all plan types. Another is employee demographics, because turnover, sometimes at 25%, makes mandatory enrollment less viable.
Call to action:
- Introduce mandatory participation where it fits your plan situation. If cost is an issue, adjust the contribution formula to offset this for new members.
- Incorporate discussions of enrollment at annual performance reviews and at annual re-enrollment in the benefits plan.
- Place a reminder to enrol in members’ T4 slips, “because we all know they open those.”
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