Plan Sponsors Talk About Retirement Readiness, But Plan Designs Speak Louder

Now that plan sponsors realize that 401(k) plans will the primary vehicle that most of their employees will rely on to finance their retirement, a recent survey by Towers Watson outlines how behavior has changed — especially regarding plan design, communication, fees and retirement income. Though retirement readiness appears to be top of mind, it’s only the fifth most important element when a plan sponsor designs its 401(k) plan. Auto-enrollment is helping participation, and both contributory and non-contributory matches are up, but adoption of lifetime income distribution options remains low at 6%. The general consensus is that most employees are not prepared to retire and most will have to delay retirement as the societal shift from DB to DC plans continues to dramatically reshape the retirement landscape. Read more about the survey here.