Fidelity Investments has concocted a new educational product suite to be available on your nearby desktop computer that will ease the burden that faces both defined contribution plan sponsors as well as plan participants in managing future saving needs.
With more 20,000 employers and over 12 million DC participants working with Fidelity right now, the Boston-based financial services firm says its new technologies expected to help measure the effectiveness of retirement plans and enrollment will gauge appropriate incomes levels and retirement needs.
The time is perfect, says Beth McHugh, vice president of thought leadership for Fidelity. I think a lot of what we are hearing from plan sponsors today is really the need to help them better understand. For example, what is my level of income is my plan designed to deliver, how are my employees leveraging the plan as its designed and what more can I do as an employer to help improve the savings rates for my participants.
The employer product, which offers tools such as Executive Insights and The On-Plan Indicator, is expected to help employers measure effectiveness of plans, where to tweak certain elements and analyze whether employees are in line with saving benchmarks. While Executive Insights was previously available to select larger employers and is now offered to Fidelitys more than 20,000 clients, the plan metric tool will be released to employers in the spring.
When looking at the true benefit for employers, McHugh explains that these products permit company HR, benefits and treasury departments to understand the cost-benefits of their savings and retirement programs.
Also, for employees, the Personal Progress Report, which is currently available, mirrors the plan sponsors snapshot tool. The Easy Enroll and Easy Savings Program, an option that allows for easy registering in workplace savings plans and permits employees to select from three suggested savings rates, will be unveiled in the summer.
Fidelitys McHugh says that it leveraged behavioral science, where it has been common knowledge that participants are likely to select the lower of three saving rates when given an option. Because of this, the tool only allows for higher savings rates that surpass average rates currently used in the DC marketplace.
Were entering the next generation; weve seen so much progress being made with good and solid plan design like automatic enrollment and automatic increase, McHugh explains. Now I think as the defined contribution is in essence the primary for millions and millions of Americans, its really important that they are taking full advantage of that.
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