Enrollment Is Automatic for One-Third of Defined-Contribution Pension Plans Worldwide, Mercer Says

One-third of employers globally offer at least one automatic feature in their defined-contribution plans, according to a Mercer survey.

In the survey of 1,500 employers representing $440 billion in defined-contribution pension plan assets, 33 percent said they offered automatic enrollment in their defined-contribution pension plans, 33 percent offered automatic escalation, and about 20 percent offered automatic rebalancing.

Among employers offering a default investment option, 67 percent use lifecycle funds, the survey found. Also, 90 percent of employers considering adding or changing a default option are looking at lifecycle funds.

Seventy-two percent of employers surveyed have 15 or fewer investment options in their defined-contribution pension plans.

Only one-third of employers plan to change their fund lineups over the next two years. Of those, most plan to increase their options or introduce a lifecycle fund.

Also, while 74 percent of employers have a targeted employee participation rate of 80 to 100 percent, only half of them have achieved that goal.

The survey was conducted in June.

Filed by Jeff Nash of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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