Transamerica survey finds 64% of auto-enrolling healthcare plans miss the full employer match

Transamerica's Retirement Plan Trends in Healthcare Survey found 64% of auto-enrolling plans did not align their default deferral with the contribution needed for the full employer match. An employee who accepts the default can leave part of the employer contribution unclaimed.

Use of automatic enrollment climbed to 77% of surveyed healthcare employers, from 62% in 2024. The report described sponsors adopting features that support outcomes but finding it 'challenging to move participants from access to action.'

Eighty-two percent of plans enroll participants at 3% or less, and only 5% default them at 6% or more. Only 1% of plans re-enroll employees annually after they opt out, and 11% of healthcare employees contribute more than 7% of pay.

Employers told Transamerica they are generally satisfied with their plans but said employees need simpler, more personalized retirement support. The report stated, 'The unique challenges of demanding and unpredictable work schedules make it important for providers to offer proactive communication, flexible education options, user-friendly digital tools and individualized guidance.' Employers pointed to plan complexity and jargon as possible drags on engagement.

On the investment menu, 89% of plans offered target-date funds, often the qualified default investment alternative. Stable value appeared at 88% of plans, managed accounts at 71%, and 58% offered or planned to offer collective investment trusts. Many organizations also reported evaluating or exploring lifetime income options.

RCD reported this month that the firm's pooled plan assets reached $34.2 billion, up more than 60% over five years. The recordkeeper's research also found 48% of employers without a plan would consider joining one.