• Make it automatic. Sponsors of 401(k) plans are increasingly automatically enrolling employees in their retirement savings plans. In the past decade, use of automatic enrollment nearly doubled, according to the Plan Sponsor Council of America’s (PSCA) 60th Annual Survey of Profit Sharing and 401(k) Plans. The PSCA reported that 59.7 percent of plans have an automatic enrollment feature in 2016 compared to 35.6 percent in 2007.

Automatic enrollment is more common in larger plans with 5,000 or more participants, the PSCA reports, where 70 percent have such features. Meanwhile, only 34 percent of plans with fewer than 50 participants rely on automatic enrollment. And more than half of plans establish automatic enrollment for new hires only.

Those numbers seem to indicate opportunities galore for employers to add or expand their use of automatic features. And many companies that apply automatic enrollment fail to complement the behavioral finance technique by automatically enrolling all employees.

While 73.4 percent of plans with automatic enrollment also automatically increase default contribution rates, only one-third of these plans automatically increase rates for all participants, according to the PSCA. Just 12 percent of plan sponsors escalate default deferral rates for all participants who are not saving enough to retire based on established benchmarks.

• Make it easy. Automatic enrollment and escalation features may help overcome inertia on the part of employees to save or save enough for retirement. However, by themselves, these features cannot solve another behavioral finance problem: how to invest retirement assets.

Incorporating a Qualified Default Investment Alternative (QDIA) may help make it easier for retirement plan participants to get started with retirement savings by removing the difficult decision of selecting the right investment options. A QDIA may also provide fiduciaries with relief if retirement plan participants suffer losses to their retirement savings.

An appropriate QDIA includes a diversified mix of investments that takes into account a participant’s age or retirement date. In some instances, a capital preservation product such as a stable value fund may be used as a default investment for the first 120 days.

• Make them understand. Opportunities to educate workers about retirement planning and investing abound. Many providers offer educational resources such as web-based tools, webinars and literature. Some providers make educational specialists available to lead seminars on a wide range of retirement and financial planning topics and sometimes are available to meet with workers one-on-one.

• Establish a target. There are several investment products that qualify as a QDIA, including target date funds (TDFs), managed accounts, balanced funds and stable value funds. Increasingly, TDFs are gaining traction among employers as an investment solution that helps participants not only reach their retirement goals but manage their investment risk as they edge closer to retirement.

Seventy-three percent of plan sponsors now offer TDFs, which have attracted an average of 22 percent of all plan assets, according to the PSCA. Ten years ago, less than 10 percent of all plans offered TDFs.

Because TDFs typically scale back a participant’s exposure to equities over time, especially as the saver is five to 10 years before retirement, the funds may help protect retirement savings from bear markets or sudden market downturns just when the assets are needed to generate retirement income. Pre-retirees within 10 years of retirement and retirees may not have the time to adequately recover from significant market losses.