Top of Mind


Revisiting My 2018 Retirement Plan Trends

A little over one year ago, I made some predictions as to what the hot trends would for retirement plans in 2018. Let’s take a look to see how accurate I was:

  • Next generation auto-enrollment techniques will gain in popularity - Verdict: Unknown. I have not yet seen any studies of 2018 data for trends in auto-enrollment, so the jury is still out as to whether I was right about increases in next level auto-enrollment techniques such as auto-escalation and auto-enrollment for existing (as opposed to new) employees. Stay tuned on this one!
  • Locating missing participants — Verdict: Yes. I appear to have hit the mark on this one, as I cannot think of a plan sponsor who has not made progress on this issue in 2018 or has it high on their list or priorities.
  • Large plan sponsors pushing the envelope on 403(b) investment offerings — Verdict: No. The University of California’s bold move into collective investment trusts (CITs) in 2017 was followed in 2018 by—crickets. If other plan sponsors are pushing the envelope, they are being awfully quiet about it. So, a swing and a miss here for me.
  • Fixed-dollar recordkeeping fees — Verdict: No. The adoption of fixed-dollar recordkeeping fees was limited. One reason for this may be that many recordkeepers still haven’t gotten the hang of pricing plans on a fixed-dollar basis, particularly in regard to 403(b) plans, where there has been little market penetration. So, another swing and a whiff, though I haven’t given up on this one for 2019!
  • Millennials saving as much as everyone else, or possibly more — Verdict: Yes. A number of surveys (including this one) have revealed that, while there is work to be done, millennials are doing a better job of saving for retirement than their parents or grandparents did. So, score another in the win column for me.

To summarize, looks like I had two hits, two misses, and one to be decided. How will I fare with the 2019 trends I predicted?

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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