full study
Executive Summary
SIGNIFICANCE OF AUTO-ENROLLMENT: Automatic enrollment of participants in 401(k) plans, which was encouraged by provisions in the Pension Protect Act of 2006, is designed to overcome the drawbacks of voluntary enrollment by getting more workers to save in their work place retirement plan. Auto-enrollment for 401(k) plans has been demonstrated by previous EBRI research to have substantial potential benefits for some employees.
NEW EBRI RESEARCH: This EBRI study analyzes plan-specific data of 1,000 large defined contribution plans for salaried employees from Benefit SpecSelect™ (Hewitt Associates LLC) in 2005 and 2009 to compare a subsample of plan sponsors that did not have auto-enrollment in 2005 but that had adopted it in 2009. Actual plan information on both actual auto-enrollment and actual match rate information were coded both before and after adoption of auto-enrollment from 225 large 401(k) plan sponsors and found that the average change was positive under auto-enrollment in each of the following three categories:
• The first-tier match rate.
• The effective match rate.
• The average total employer contribution rate.
MODELING ANALYSIS: This analysis created a series of simulation programs using these data. The analysis indicates that the adoption of automatic enrollment in 401(k) plans is likely to have a very significant positive impact (even greater than EBRI projected in 2008) in generating additional retirement savings for many workers, especially for young and low-income workers:
• Under baseline assumptions, the median 401(k) accumulations for the lowest-income quartile of workers currently age 25–29 (assuming all 401(k) plans were voluntary enrollment plans as typified by the 225 large plan sponsors described above) would only be 0.08 times final earnings at age 65.
• However, if all 401(k) plans are assumed to be using the large plan sponsor auto-enrollment provisions, the median 401(k) accumulations for the lowest-income quartile jumps to 4.96 times final earnings (if 401(k) participants revert back to the default contribution when they change jobs) and 5.33 times final earnings (if they retain their previous contribution level when they change jobs).
• There are also large increases even for high-income workers: The multiple under a voluntary enrollment scenario is 2.41 times final earnings compared with 9.15 or 9.81 under auto-enrollment, depending on the assumptions for employee reversion to default contribution rates upon job change.
Future EBRI research will examine the extent to which the increased 401(k) generosity resulted from modifications to defined benefit plans as pension plans were close or frozen.
Thursday, March 18, 2010
Wednesday, January 27, 2010
Friday, January 22, 2010
Thursday, January 21, 2010
Tuesday, December 22, 2009
401(k) Auto-Enroll Has Unintended Impact
401(k) Auto-Enroll Has Unintended Impact
Financial Advisor Magazine
Financial Advisor Magazine
Friday, October 16, 2009
You might need to revamp your retirement savings strategy in light ...
You might need to revamp your retirement savings strategy in light ...
ConsumerReports.org
ConsumerReports.org
Saturday, October 10, 2009
Friday, October 09, 2009
Press coverage of year-end 2008 EBRI/ICI 401(k) results
Average 401(k) Balance Fell 24% in 2008
BankInvestmentConsultant.com - 28 minutes ago
By Money Management Executive Workers who had already been investing in their 401(k) for at least five years through 2008 saw their balances drop an average ...
Average 401(k) Balance Fell 24% in 2008
Financial-Planning.com - 32 minutes ago
By Money Management Executive Workers who had already been investing in their 401(k) for at least five years through 2008 saw their balances drop an average ...
Average 401(k) Balance Fell 24% in 2008
On Wall Street - 33 minutes ago
By Money Management Executive Workers who had already been investing in their 401(k) for at least five years through 2008 saw their balances drop an average ...
Don't be scared away from 401(k) investments
Jackson Clarion Ledger - 1 hour ago
If you are wondering if it's still worth the worry to invest in a 401(k) or similar workplace retirement plan, stop your hand-wringing. It is. ...
Your retirement plan is still valuable
OCRegister - 3 hours ago
If you are wondering if it's still worth the worry to invest in a 401(k) or similar workplace retirement plan, stop your hand-wringing. ...
Right time to invest in a 401(k) plan? Absolutely
HeraldNet - Michelle Singletary - 5 hours ago
If you are wondering if it's still worth the worry to invest in a 401(k) or similar workplace retirement plan, ...
Daily Press - 6 hours ago
WASHINGTON — If you are wondering if it's still worth the worry to invest in a 401(k) or similar workplace retirement plan, stop your hand-wringing. ...
The Forecast Is Sunny if You Weather the 401(k) Storm
Washington Post - Michelle Singletary - 12 hours ago
If you are wondering whether it's still worth the worry to invest in a 401(k) or similar workplace retirement plan, ...
Market Meltdown Costs 401(k) Participants One-Third of Their Retirement Savings
Workforce Management - 16 hours ago
The average 401(k) participant lost nearly one-third of his or her retirement account assets in 2008 because of the market downturn, according to a report ...
Long-Term 401(k) Balances Up Despite Recession
Planadviser.com - Rebecca Moore - 16 hours ago
October 07, 2009 --- After rising for five years, the average 401(k) retirement account fell 24.3% in 2008, according to an analysis of participants in the ...
How Your 401(k) Investments Stack Up
U.S. News & World Report - Emily Brandon - 16 hours ago
The bulk of 401(k) assets are invested in stocks. At the end of 2008, 56 percent of 401(k) participants' savings was invested in the stock ...
401(k) Assets Fell 30.5% in 2008
Financial Advisor Magazine - 17 hours ago
A new report has quantified the damage the 2008 bear market inflicted upon Americans' 401(k) savings and, as expected, it was severe. ...
401(k) balances fall sharply in 2008: Study
Business Insurance - Jerry Geisel - 19 hours ago
Employees' 401(k) plan account balances fell sharply in 2008 as equities markets plunged, but the account balances remain significantly higher than a few ...
401(k) investors: Hit hard in '08, doing better now
CNNMoney.com - Jeanne Sahadi - 21 hours ago
The financial crisis pounded investors, and a new report details just how badly. But 401(k) participants have since prevailed over the most punishing market ...
Detroit Free Press Susan Tompor Column: 401(K) Savers Took Beating During ...
istockAnalyst.com (press release) - Oct 7, 2009
Pretty bad. So bad that most savers probably don't need a study to confirm it. --Many American workers suffered an average 24.3% decline in their 401(k) ...
For Consistent Savers, 401k Balances Shrunk 24 Percent in '08
MutualFundWire.com (subscription) - Adam Kommel - Oct 7, 2009
The average 401(k) account balance consistently held since 2003 fell 24.3 percent in 2008, a report authored jointly by the Employee Benefit Research ...
For Consistent Savers, 401k Balances Shrunk 24 Percent in '08
MutualFundWire.com - Adam Kommel - Oct 7, 2009
The average 401(k) account balance consistently held since 2003 fell 24.3 percent in 2008, a report authored jointly by the Employee Benefit Research ...
401(k) accounts took a beating in '08
Chicago Sun-Times - Francine Knowles - Oct 7, 2009
The Employee Benefit Research Institute's database of 24 million 401(k) plan participants showed the average ...
401(k) savers took beating during meltdown of '08
Detroit Free Press - Susan Tompor - Oct 7, 2009
Pretty bad. So bad that most savers probably don't need a study to confirm it. • Many American workers suffered an average 24.3% decline in ...
A Post-Mortem on Your 401(k)s in 2008
Wall Street Journal - Andrea Coombes - Oct 6, 2009
Maybe the best that can be said about the effect of last year's market crash on average 401(k) balances is: It could have been worse. ...
401(k) asset gain seen despite market meltdown
Pensions & Investments - Jeff Nash - Oct 6, 2009
“Consistent” 401(k) participants — those who have held accounts with the same employer every year from January 2004 through December 2008 ...
New Research from EBRI/ICI: 401(k) Balances Fell in 2008 Bear Market
PR Newswire (press release) - Oct 6, 2009
WASHINGTON, Oct. 6 /PRNewswire-USNewswire/ -- American workers who held 401(k) accounts consistently from 2003 through 2008 suffered a 24.3 percent average ...
New Research from EBRI/ICI: 401(k) Balances Fell in 2008 Bear Market
Webnewswire.com - Oct 6, 2009
prnewswire-usnewswire/ -- American workers who held 401(k) accounts consistently from 2003 through 2008 suffered a 24.3 percent average drop in their ...
New Research from EBRI/ICI: 401(k) Balances Fell in 2008 Bear Market
SunHerald.com (press release) - Oct 6, 2009
Despite Losses, Ongoing Contributions Pay Off in 5-Year Account Growth WASHINGTON, Oct. 6 /PRNewswire-USNewswire/ -- American workers who held 401(k) ...
Retirement Funds Fell Less than Broader Market in 2008, Study Says
Wall Street Journal - Andrea Coombes - Oct 6, 2009
Maybe the best that can be said about the effect of last year's market crash on average 401(k) balances is: It could have been worse. ...
New Research from EBRI/ICI: 401(k) Balances Fell in 2008 Bear Market
Earthtimes (press release) - Oct 6, 2009
WASHINGTON, Oct. 6 /PRNewswire-USNewswire/ -- American workers who held 401(k) accounts consistently from 2003 through 2008 suffered a 24.3 percent average ...
New Research from EBRI/ICI: 401(k) Balances Fell in 2008 Bear Market
SYS-CON Media (press release) - Oct 6, 2009
WASHINGTON, Oct. 6 /PRNewswire-USNewswire/ -- American workers who held 401(k) accounts consistently from 2003 through 2008 suffered a 24.3 percent average ...
Typical US Worker Saw 401(k) Lose 24.3% in 2008
BusinessWeek - Lauren Young - Oct 6, 2009
The average 401(k) account balance was $86513 at year-end 2008. (At the end of 2007, the average investor had an account balance of $114337. ...
Detroit Free Press - Susan Tompor - Oct 6, 2009
Pretty bad. So bad that most savers probably don't need a study to confirm it. • Many American workers suffered an average 24.3% decline in ...
In the balance: 401(k) participants lose one-third of their assets
InvestmentNews - Sara Hansard - Oct 6, 2009
The average 401(k) participant lost nearly one-third of their retirement account assets last year because of the market downturn, ...
US Workers' 401(k)s Fell 30% Last Year - Report
Wall Street Journal - Oct 6, 2009
American workers with 401(k) accounts saw their savings ravaged during 2008's bear market, though people with accounts for at least five years saw smaller ...
401(k) investors: Hit hard in '08, doing better now
CNNMoney.com - Jeanne Sahadi - Oct 6, 2009
The financial crisis pounded investors, and a new report details just how badly. But 401(k) participants have since prevailed over the most punishing market ...
But average 401(k) balance among consistent savers fell 24% in 2008
MarketWatch - Andrea Coombes - Oct 5, 2009
By Andrea Coombes, marketwatch SAN FRANCISCO (marketwatch) -- Maybe the best that can be said about the effect of last year's market crash on average 401(k) ...
Subscribe to:
Posts (Atom)