WITH PROVISIONS OF With provisions of the Pension Protection Act (PPA) set to begin taking effect on January 1, America’s oldest workers – those over the age of 55 – believe they would be in better financial shape today if the Act had been passed 25 years ago.

In fact, older workers not only embrace the Act’s core auto-enrollment and automatic-contribution features, they wholeheartedly recommend the “auto-pilot” approach for today’s youngest workers because they believe that professional, third-party plan management will benefit those just starting out in the workforce and lead to better retirement outcomes.

According to Prudential Retirement’s “Fifth Annual Workplace Report on Retirement Planning,” 75 percent of older workers would have felt “grateful” or “optimistic” if employers had automatically enrolled them in their workplace-provided defined contribution (DC) plans on the day they started working.  And 68 percent would have felt “grateful” or “optimistic” about an automatic contribution escalation program. 

Moreover, 80 percent of older workers would “strongly” or “somewhat strongly” recommend automatic enrollment and automatic contribution escalation for younger workers.  And similar percentages would take the PPA a step or two further by recommending automatic plan features that would:

• Default contributions into professionally managed asset-allocation funds; and
• Convert DC plan assets into a guaranteed monthly income stream at retirement.

Without question, speaking from personal experience – from the perspective of managing their own defined contribution plans for 30 years – the oldest cohort of America’s workforce embraces PPA and believes that an “automatic” DC approach would have been better for them … and will be better for the youngest generation of American workers.

Contact your Prudential Retirement Regional Director or the Sales Desk at 800-353-2847 to learn more about our survey results.

Securities products and services are offered by Prudential Investment Management Services LLC (PIMS), Three Gateway Center, 14th Floor, Newark, NJ 07102-4077. PIMS is a Prudential Financial company.  Prudential Retirement’s Manager of Managers group annuity contracts are issued by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, a Prudential Financial company.  Prudential Retirement is a Prudential Financial business. Prudential Retirement and Prudential Financial are registered service marks of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

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