Protecting Defined Contribution Plan Retirement Savings During Disability

As employers have moved away from traditional defined benefit plans toward defined contribution plans as the primary retirement savings vehicle for their employees, much has been written about the risks of shifting the retirement savings burden from the employer to the employee. One widely-recognized consequence of this shift in retirement savings methods is that many employees are not contributing enough of their income, or earning high enough returns on their investments, to provide sufficient funds to meet their retirement needs through defined contribution plans. Many plan sponsors have responded to this concern by adding features to their defined contribution plans, such as automatic enrollment, automatic annual increases of employee deferral percentages and increased matching contributions, in order to encourage employees to save more for retirement.