International Society of Certified Employee Benefit Specialists News

Next Generation of 401(k)s Shows Automatic Enrollment and Step-Up Provisions Doubling Among Employers: Deloitte Survey

NEW YORK, July 22 PRNewswire — Employers are taking decisive actions to make 401(k) plan participation as easy as possible for employees, according to the 2008 401(k) Benchmarking Survey, conducted by Deloitte, the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists (ISCEBS). Survey respondents addressed such topics as eligibility and enrollment, contributions, matching formulas, investment funds, revenue sharing, defined benefit plans, fees, vendors, plan effectiveness, communications and administration.

Of the 436 plan sponsors surveyed, 42 percent now have an automatic enrollment feature — nearly double the 23 percent total in the last survey. Another 26 percent say they are considering auto-enrollment. Step-up provisions that automatically increase deferral percentages on the participant's behalf also doubled, to 35 percent from 18 percent in the last survey.

Time-based lifestyle funds remained popular, with 57 percent of respondents offering programs, up from 44 percent in the last survey and 28 percent in 2004. The opportunity to contribute to Roth 401(k) plans, while still not widespread, also jumped significantly as 23 percent of respondents reported offering that feature, almost doubling from 12 percent in the previous survey.

"Given today's economic uncertainties, employees may be tempted to stop saving as they deal with their immediate financial needs," said Michael Wilson, chief executive of the International Foundation. "It is critical that employees take advantage of their 401(k) options. To this end, we're seeing employers adjust their 401(k) offerings to be more appealing to employees. They are also stepping up their education efforts."

Despite their efforts to improve the consumer appeal of plans, respondents still believe most of their employees are not taking advantage of their 401(k) plans to effectively fund their retirement. Fewer than one in five believe "most" employees are adequately saving enough for retirement.

"The lingering question comes down to retirement responsibility," said Mark Dzierzak, senior manager with Deloitte Consulting and director of the survey. "It really is a two-way street. Employers and providers should not only continue providing new tools and options that will create the most effective participant experience, but should regularly evaluate whether or not those approaches are effective and make the necessary adjustments. Employees on the other hand, need to understand that investing in a 401(k) is not without risk or effort, but that the greater risk may lie in not taking full advantage of what employers have placed right in front of them."

You may download the full press release at www.deloitte.com/us/401kpressrelease2008 and the full survey report at www.deloitte.com/us/401k or www.iscebs.org.

About Deloitte

As used in this document, "Deloitte" means Deloitte Consulting LLP and Deloitte Services LP, which are separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

About the International Foundation

The International Foundation of Employee Benefit Plans is a nonprofit organization, dedicated to being a leading objective and independent global source of employee benefits, compensation, and financial literacy education and information. With 35,000 members representing multiemployers, public sector, corporate, and Canadian organizations, it is the largest association of its kind. Services include the CEBS designation, online training, the world's largest employee benefits library, publications, education programs, and a jobs and resume service. For more information, please visit the International Foundation Web site at www.ifebp.org

About International Society of Certified Employee Benefit Specialists

The International Society of Certified Employee Benefit Specialists (ISCEBS) is a non-profit educational association whose members have earned the Certified Employee Benefit Specialist (CEBS) designation, which is cosponsored by the International Foundation of Employee Benefit Plans and the Wharton School of the University of Pennsylvania. For more information on the Society or CEBS, please visit the ISCEBS Web site at www.iscebs.org.

www.deloitte.com Contact: Britton Josey Brenda Rood Deloitte ISCEBS Public Relations Public Relations 404-220-1334 262-373-7756 bjosey@deloitte.com brendar@ifebp.org

SOURCE Deloitte

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