Automatic enrollment in workplace retirement plans and the default rate for employees’ savings will continue to escalate over the next three years, according to Transamerica Retirement Solutions.
Almost all of the 62 retirement plan administrators surveyed (95 percent) feel 55 percent of employers will automatically put employees in retirement plans within three years, up from 50.2 percent who have automatic enrollment now, according to research by Transamerica.
The survey included plans that have from $25 million to $1 billion in assets.
Three-quarters of those surveyed feel 45 percent of employers will set the default rate for employees’ contributions to retirement plans at 6 percent within three years instead of the 2 percent to 4 percent that many use now. Currently, 40.2 percent of plan sponsors set default rates at higher than 3 percent.
In addition, 92 percent say that nearly all retirement plan providers will give participants information about their state of retirement readiness. Employers will rely more on mobile applications for these and other retirement plan alerts as more people work at home or from remote locations, Transamerica says.
In addition, providers will make their websites more accessible through handheld devices, developing applications that will allow participants to access their retirement accounts through any mobile device, 86 percent of the respondents say.
“While plan sponsors are still focused on increasing participation in retirement plans by their employees, they are also looking for ways to increase contribution rates participants need to achieve a successful retirement,” says Wendy Daniels, senior vice president of retirement marketing for Transamerica Retirement Solutions.
“An expanded and more sophisticated use of mobile applications will help overcome communications challenges brought on by an increasingly dispersed workplace and also help participants manage their retirement funds more effectively,” she adds.