These are:
Deferral rates and plan design
Asset allocation
Rebalancing behavior
Individual fund performance
We contend that the industry would do well to bear this hierarchy in mind when considering ways to boost retirement preparedness. As we look at the progress participants are making toward securing a better retirement savings outcome, deferral rates are one of the most important factors to stress, whether in communication to participants about how to accumulate more wealth or in restructuring DC plans for better saving and investing success.
W. Van Harlow, Ph.D., CFA, is the director of research at the Putnam Institute.
1 See notes on methodology at the end of this paper for more details.
2 Source: Profit Sharing Council of America 53rd Annual Survey, 2011.