February 14, 2006

Most Likely Modifications to DC Plans in 2006

What are the most likely features employers will add to their defined contribution plans in 2006? This survey by Hewitt--"Hot Topics in Retirement for 2006"--lists the following:

  • Automatic enrollment
  • Automatic rebalancing*
  • Online third party investment advisory services
  • Automatic contribution escalation**
  • Roth 401(k) contributions
  • Managed accounts
  • Annuities as a form of payment option; and
  • 401(k) disability insurance.

* Automatic rebalancing - the ability of employees to have their investment mix rebalanced periodically to a target mix of investments that they select.
**Automatic contribution escalation - the ability of employees to have their contributions to a plan automatically increased over time.

Posted by B. Janell Grenier at February 14, 2006 10:34 PM