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Q: We added automatic enrollment a few years ago and are considering adding automatic escalation later this year. Is there any current data regarding participant satisfaction with this plan design feature?
A: You are not alone in considering adding an automatic escalation to your plan design. According to JP Morgan’s 2025 Defined Contribution Plan Sponsor Survey findings, 39% of plan sponsors currently offering automatic enrollment plan to add an automatic escalation feature this year. The survey results make a strong case for doing so: 89% of surveyed participants who report that their contributions are automatically escalated each year are satisfied with the experience and are also more confident that their savings will last their lifetimes.
Q: Our investment committee is looking for the most recent industry research regarding trends in mutual fund fees paid by 401(k) participants. Can you provide any updates?
A: According to the most recent research from the Investment Company Institute, 401(k) plan participants have incurred substantially lower fees for holding mutual funds over the past 25 years. The Economics of Providing 401(k) Plans: Services, Fees, and Expenses, 2024 shows that from 2000 to 2024, the average equity mutual fund expense ratio paid by 401(k) investors dropped by more than 50 basis points (66%), offering them potentially higher returns and balances in retirement. The average expense ratios that 401(k) plan participants incurred for investing in bond mutual funds fell by 69% during that same period. In addition, from 2008 to 2024, average target date fund expense ratios decreased by 57%.
Q: Do you have any current information on the extent of “lost” or “abandoned” workplace retirement accounts across the country?
A: Capitalize Money Inc., a technology company that helps people find missing retirement assets, recently reported that the number of abandoned 401(k) accounts in the United States has almost doubled over the past decade to an estimated 31.9 million accounts (as of July 2025). The accounts now hold $2.13 trillion in assets, an increase of nearly 30% since mid-2023, according to a recent update to the firm’s 2023 white paper, The True Cost of Forgotten 401(k) Accounts, written in partnership with the Center for Retirement Research.
Kmotion, Inc., 12336 SE Scherrer Street, Happy Valley, OR 97086; 877-306-5055; www.kmotion.com
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This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance, nor as the sole authority on any regulation, law, or ruling as it applies to a specific plan or situation. Plan sponsors should always consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.
This material is intended to provide general financial education and is not written or intended as tax or legal advice and may not be relied upon for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.