Changing With the Times: In light of the recent changes in pension law, more
companies are making changes to their defined-benefit and defined-contribution
plans. The goal of these changes is to better manage their risk and make sure
employees are on track to save enough for retirement, according to a recent
study by Hewitt Associates.
Sixty-three percent of companies offering traditional defined-benefit plans
say they are very likely to perform funding and accounting projections, while 30
percent say they plan to perform an asset liability study. Twenty-nine percent
say they are very likely to assess the risks that their pension plans are
running based on their current strategies.
Similarly, more than half of employers offering defined-contribution plans
say they plan to review their fund operations, including expenses and revenue
sharing. Thirty-five percent of respondents say they are very likely to review
their 401(k) plan governance structure or hire an independent third party to
review their investment options.
To better help employees save for retirement, 44 percent of companies
surveyed automatically enroll employees into their 401(k) plans, up from 37
percent last year. Twenty-two percent of respondents offer automatic escalation
as part of automatic enrollment.
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