Annual Defined Contribution Benchmarking Survey (2013-2014 Edition)
Stronger economy provides the building blocks for positive trends in DC plans
Plan sponsors responding to Deloitte’s Annual Defined Contribution Benchmarking Survey report an encouraging six percentage point uptick in the average employee participation rate, which rose from 71 percent in 2012 to 77 percent in 2013. But figuring out how to lure the remaining quarter of employees and increase engagement levels overall continues to be a perplexing challenge.
The improving economy seems to have alleviated some employee anxiety about setting aside money for the future. The top reason respondents gave for lack of employee participation shifted from “uncertain economy/job market” (14 percent in 2013 vs. 24 percent in 2012) to “lack of awareness or understanding” (30 percent in 2013 vs. 21 percent in 2012). But with the majority of respondents (82 percent) reporting that educational tools and resources widely available, why are so many employees still not engaged or interested?
It may be that offering alternatives to traditional communications channels can help here. Employee satisfaction with handheld connectivity tools continues to climb, jumping to 61 percent in 2013 from 53 percent in 2012 and 28 percent in 2011. This points to a significant opportunity. So far, 20 percent of responding retirement plans use the latest communication methods (e.g. smartphone and tablet apps) to educate employees on retirement readiness, more than half support transaction processing via a mobile device and 31 percent report their participants are using apps to interact with recordkeepers.
To further boost participation, more plan sponsors are offering immediate eligibility for matching contributions, reducing eligibility restrictions and offering auto-enrollment.
The Annual Defined Contribution Benchmarking Survey is sponsored jointly by Deloitte, the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists and includes electronic responses from 265 public and privately held companies in a comprehensive range of industries. Topics surveyed include eligibility and enrollment, contributions, investments, fees, administration capabilities and innovation and provider relationships.