Our Wired World

How Default Electronic Delivery for Retirement Plan Communications Could Save Participants Up To $450m Annually

Supporting digital disclosure proposed by the Department of Labor.

New research from the SPARK Institute shows that  retirement plan participants are overwhelming willing to accept electronic communications improving retirement outcomes by an average 9% over the savings period

SIMSBURY, CT, December 5, 2019 — The SPARK Institute today released new research findings that overwhelmingly support the Department of Labor’s (DOL) proposal to permit default electronic delivery of retirement plan documents and demonstrates numerous material benefits, in addition to cost savings, for participants.

Tim Rouse, Executive Director of the SPARK Institute stated, “This latest research significantly endorses the Department of Labor’s electronic delivery proposal and the undeniable benefits for the nation’s retirement savers.” Rouse added, “ It clearly demonstrates improved retirement outcomes with electronic delivery and on-line access that can reduce costs and increase savings for the average retiree by 9% over the accumulation period.”

Congressman Phil Roe (R-TN) said “The SPARK Institute’s research definitively shows that e-delivery is good for savers and reaffirms my confidence in the Department of Labor’s proposed e-delivery rule.”

‘Default Electronic Delivery Works’

SPARK released the latest research “Default Electronic Delivery Works: Evidence of Improved Participant Outcomes from Electronic Delivery of Retirement Plan Documents” and the findings demonstrate :

  • Between $250 to $450 million in annual aggregate savings would accrue directly to individual retirement plan participants improving participant retirement security by up to 9 % during the accumulation phase.
  • 99% of retirement plan participants have internet access and 88% use the internet on a daily basis.
  • Final account balances for retirement plan participants could increase by 63% with modest increases in their deferral rate driven by e-delivery nudges and engagement with online tools.
  • Under conservative assumptions, a 35-year old worker who is defaulted into electronic delivery (in addition to engaging with online tools and educational resources) could gain 149 % more in retirement savings at retirement.
  • Provides a better guarantee of actual receipt of information helping address missing participants and strengthens cybersecurity to prevent online account fraud.
electronic delivery of retirement plan information provides an efficient, secure, and reliable means of communicating important plan information, which reduces costs and facilitates superior outcomes...

The report details the measurable benefits are demonstrated for all participants from current workers to the newly enrolled, and across all age cohorts from younger to older participants alike. The research concludes that electronic delivery of retirement plan information provides an efficient, secure, and reliable means of communicating important plan information, which reduces costs and facilitates superior outcomes.

The SPARK Institute recently wrote to the DOL in strong support of the pending electronic delivery proposal.

For more information, please contact Tim Rouse at tim@sparkinstitute.org.



About the SPARK Institute
The SPARK Institute represents the interests of a broad-based cross section of retirement plan service providers and investment managers, including members that are banks, mutual fund companies, insurance companies, third-party administrators, trade clearing firms, and benefits consultants. Through the combined expertise of its member companies, the Institute provides research, education, testimony, and comments on pending legislative and regulatory issues to members of Congress and relevant Government agency officials. Collectively, its members serve approximately 100 million participants in 401(k) and other defined contribution plans.