Plan Design During Challenging Times

Plan design during challenging times: 7 Actionable Insights from Behavioral Finance

These are extremely challenging times for employees and employers. According to Voya surveys of plan participants, the percentage of participants with a positive retirement sentiment fell by 13 points in March, from 74% to 61%1. Surveys of companies from the spring reflected a similar trendline, as approximately 20% of plans with a match said they were considering eliminating or suspending their match to cut costs2. While the outlook has since improved — 75% of participants reported a positive retirement sentiment in August — the crisis may have a lasting impact on retirement outcomes due to increased withdrawals during the Covid-19 crisis.

This paper outlines the following recommendations for improving plan design:

  1. Boost auto-enrollment deferral rate to 7%
  2. Boost annual auto-escalation rate to 2%
  3. Boost the escalator cap to 15%
  4. Enrolling and re-enrolling all employees holistically
  5. Rethinking the online enrollment architecture
  6. Consider the stretch match
  7. Consider the fixed dollar match


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  1. Voya internal data, March 2020
  2. 2020 PSCA Survey

Dr. Benartzi is a paid consultant to Voya Services Company, a wholly-owned subsidiary of Voya Financial Products and services offered through the Voya® family of companies.

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