DC Plan Automatic Features and Greater Financial Wellness Programs
The acceleration of adopting new plans—especially in the small business segment—will expand the utilization of automatic enrollment and auto-increase solutions, but the IRIC does not expect to see auto-solutions within in-plan retirement income options.
Additionally, hybrid investments with embedded income solutions will need more broad-based plan adoption before being considered Qualified Default Investment Alternatives (QDIAs), the IRIC notes.
The organization also expects to see enhanced communication efforts from plan sponsors and retirement plan advisors, as more workers seek advice and guidance.
This includes pre-retiree education and planning programs. According to the IRIC, the pre-retiree module will consist of personalized planning tools for retirement income projections, including integrating non-DC plan retirement income sources; education about Social Security and Medicare program offerings and decision elections; and budgeting and tax planning for post-retirement life and opportunities to accumulate additional retirement savings before retirement. The pre-retiree programs will be offered to employees over the age of 50 to give them time to plan prior to retirement.
This list of expectations from the IRIC aims to transition DC plans from supplemental savings vehicles to programs that foster retirement security, explained Crain. “By addressing the dual needs of accumulation and de-accumulation, plan sponsors and industry leaders are fostering a more robust and equitable retirement system,” he said.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
