Retirement plan contributions ought to increase automatically once participants hit age 45, many workers say.
LIMRA, Windsor, Conn., has published that finding in a summary of results from an online survey of about 300 consumers who participate in or have access to a 401(k) plan or other defined contribution (DC) plan.
Of the total, 38% are automatically enrolled in their DC plans; 21% have plans with automatic contribution “escalation” features; and 16% have both automatic enrollment and escalation.
About 22% of the participants said they want the automatic contribution increase to be 1% annually starting at age 45. And 45%–most notably employees $75,000 or more annually–say they want the increase to be 2% or more annually.
LIMRA found that only 15% of employees, excluding those enrolled in auto escalation plans, had increased their contribution rate in the past 12 months, and that 42% had never changed their DC investments.
Employees who use automatic features seem to have a more favorable attitude toward automatic features, LIMRA says.
- Warren S. Hersch