For instance, sponsors should consider showing plan participants—most of whom aren’t saving enough—how much in dollar amounts they are falling behind at reaching their retirement goals in each pay period. Sponsors could also, he added, digitally show participants when they “are on track” to properly fund a retirement.
“The future is with digital nudging. That’s what we’re going to do,” Benartzi noted. This could motivate the millions of participants who are “generally cognitive lazy” to act. To get around the natural laziness of most people, he added, the “most effective solution is one in which we make everything easy.”
He advocated for autopilot programs that allow raises to go toward retirement contributions. Benartzi noted that in the United Kingdom workers are automatically entered and, in some cases, re-entered in retirement programs every three years.
Nelson added the goal is not just to persuade people to participate in retirement savings programs, but to do so effectively. And he contended that plan sponsors should be judged by a new standard. Programs should do more than raise participation rates.
“Programs should be judged,” Nelson said, “by how well you helped the participants reach their income replacement rate.”
Voya has some $466 billion in assets under management and administration.