The 2016 PLANSPONSOR Defined Contribution Survey found that, over the past three years, just 1.9% of retirement plan sponsors had re-enrolled participants in the plan’s default investment at some point, while only 4.0% re-enrolled participants saving below the default deferral rate, and 8.6% re-enrolled nonparticipating employees. As that data reveals, most sponsors have yet to embrace re-enrollment.
But among the plan clients of adviser Russell Warye that have done a re-enrollment, about 90% of their re-enrolled participants have stuck with it. Seeing that growing track record of success, he anticipates more acceptance of the practice among plan sponsors in the next few years. “It’s getting more traction now, as sponsors are looking more closely at their plans from a fiduciary standpoint,” says Warye, president of Benefit Partners Financial Group LLC in Libertyville, Illinois. “They are asking, ‘How can we make the plan better?’”Story Continued Below
Advisers working with plan sponsors debating whether to re-enroll their participants may want to consider these suggestions to achieve better results.