During the recent market downturn, defined contribution (DC) participants who used automatic rebalancing and deferral increase in their retirement savings accounts saw greater balance increases, by as much as 26%, according to a Mercer study of 1.2 million DC plan participants from October 2008 through April 2010.
The data study results, released Thursday, July 8, reinforced the benefit of automated plan design features, according to Mercer, a provider of benefits administration outsourcing based in Norwood, Massachusetts. The company is a wholly owned subsidiary of Marsh & McLennan Companies.
The data showed that participants who contributed to their plan while using a deferral increase and automatic rebalancing saw an average account balance increase of 60%. Those who contributed with rebalancing only saw an average increase of 47% and those who contributed with a deferral increase only saw an average increase of 43%.