MassMutual’s Center for Behavioral Researchsm Releases White Paper Regarding Automatic Features in Retirement Plans
(Springfield, Mass.) – MassMutual’s Center for Behavioral Research has released a new white paper to share insights and best practices regarding automatic features in retirement plans. Titled “Automation: 3 Steps to a High Performance Plan”, the white paper suggests important criteria that retirement plan advisors and sponsors should consider when evaluating the adoption of automatic plan features such as automatic enrollment, automatic deferral increase and automatic asset allocation.
“One of the interesting findings published in the white paper is that a high automatic deferral rate is not always a deterrent to high plan participation,” says Alison Salka, Ph.D., director of MassMutual’s Center for Behavioral ResearchSM. “Many plan sponsors are reluctant to elect a higher default savings rate for fear of ’turning off’ employees. Our findings suggest otherwise. Among approximately 400 plans with automatic features evaluated for the research, those with a default rate higher than three percent actually have higher participation rates (84%) than those defaulting at three percent or lower (72%).”
“Considering that defined contribution plans are the primary retirement savings vehicle for millions of American workers, plan advisors and sponsors need the help of providers like MassMutual in ensuring that participants accumulate sufficient retirement savings,” says Elaine Sarsynski, executive vice president of MassMutual’s Retirement Services Division and chairman, president and CEO of MassMutual International LLC. “Automatic features can help drive higher participation and savings rates, and can help participants invest appropriately. They are becoming an extremely effective tool in this effort.”
“Automation: 3 Steps to a High Performance Plan” is available on MassMutual’s Center for Behavioral Research Web site at http://www.massmutual.com/behavior along with other white papers that address topics important to the creation of an effective retirement savings plan.
“We encourage retirement plan advisors and sponsors to use MassMutual’s research to help them effectively plan, design and implement a retirement benefit that really works hard for participants,” says Ian Sheridan, corporate vice president and chief marketing officer of MassMutual’s Retirement Services Division. In support of its commitment to educate consumers regarding financial matters, MassMutual is the exclusive sponsor of the upcoming PBS documentary, Retirement Revolution®, being produced by WTTW National Productions in Chicago and scheduled to premiere March 31 on PBS stations across the nation.
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