Newsroom

The retirement security of millions of working Americans is becoming increasingly reliant upon an asset structure that is likely less familiar than its ubiquitous counterpart, but powerful to many.

. . .

Today, more than half of defined contribution retirement plans have adopted automatic enrollment: According to NEPC’s 2024 Annual Plan Trends & Fee Survey, released in March, 54% of DC plans used auto-enrollment and 59% offered auto-escalation.

. . .

“Starting early and saving enough are the most powerful drivers of retirement success, and auto-enrollment and [auto-]escalation make both happen seamlessly,” wrote Mikaylee O’Connor, principal in and head of DC solutions at NEPC LLC, in a response to emailed questions. “These features remove friction, boost participation and lead to more financially secure employees—translating into higher productivity, engagement and satisfaction.”

. . .

NEPC’s O’Connor wrote to PLANSPONSOR that in addition to adjusting allocations within the retirement budget, plan sponsors might also consider integrating health care and retirement into a single benefits strategy. Opportunities often exist in health care to reduce costs by revisiting plan design and better understanding current fee arrangements—potentially leading to renegotiations or better alignment of overall incentives, O’Connor explained.

For health plan design, sponsors can evaluate options such as offering high-deductible plans instead of preferred provider organizations, O’Connor wrote. Fee reviews can include examining provider fee transparency—potentially revealing opaque incentives or compensation structures—and assessing payment accuracy, as a significant portion of payments are often miscalculated.

. . .

O’Connor sees another opportunity in the auto-feature space.

“The next frontier is auto-distribution, creating a paycheck-like experience for retirees,” wrote O’Connor. “This keeps assets in the plan while simplifying income delivery—a win-win for sponsors and participants.”