Benefits

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

By Staff Report

Oct. 7, 2009


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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