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.


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Schedule, engage, and pay your staff in one system with Workforce.com.

Recommended

Join over 52,000 of your HR peers

Don't miss out on the latest tactics and insights at the forefront of HR.