Please note: This is a transcription so there may be slight grammatical errors.
Karen Denise: Under the SECURE 2.0 Act that passed into law in 2022, auto-enrollment and auto-escalation are required for most new retirement plans. But existing plans may also want to consider adding these features, which have been proven to increase plan participation, employee satisfaction, and more. To start, let’s define what we mean by auto-enrollment and auto-escalation. Auto-enrollment means automatically enrolling eligible employees in a company’s retirement plan. On the other hand, auto-escalation means automatically increasing each participant’s contribution rate over time.
Typically, the contribution rate will increase by a small percentage each year until the employee reaches a specified maximum rate.
For example, an employer might auto-enroll all its employees at 6% of their annual salaries. They might also automatically increase their contribution rate by 1% every year until the employee is deferring 10% of their salary.
Now, let’s talk about how these features can benefit retirement plan sponsors. First and foremost, research shows that auto-enrollment can significantly increase plan participation rates. This is because it removes the burden of actively opting into the plan, and when employees are auto-enrolled, the vast majority will choose to stay there.
It’s important to note that an employer’s default enrollment rate has a significant impact here. When employees are enrolled at low rates like 3%, they may assume that 3% is sanctioned by the company as the right enrollment level. This can lead to lower savings rates and less total savings over time. Plan sponsors who offer auto-enrollment and auto-escalation should carefully consider their default enrollment rate and rate of increase, and they should consistently communicate financial best practices to all employees.
Another benefit of auto-enrollment and auto-escalation is that they may increase employee satisfaction by demonstrating an employer’s commitment to their employees long-term financial wellness. In fact, studies show that auto-enrolled employees are more likely to be satisfied with their employer’s benefit packages and they’re more likely to stay loyal.
Automatic features can also help ease administrative burdens by helping the plan meet certain participation and contribution rate requirements set by the Department of Labor and the IRS. Lastly, consider competitive advantage. In a tight labor market, a robust retirement plan can be a key differentiator. Employees care about retirement plan benefits and want to work for organizations that invest in their financial wellness. Auto-enrollment and auto-escalation are two ways to demonstrate that investment.
For more information on automatic retirement plan features, call CAPTRUST. We’re here to help.
NFL rules analyst Mike Pereira describes how his nonprofit Battlefields to Ballfields turns military discipline into a second career on the sports gridiron.
From Combat Boots to Whistles
After visiting severely wounded service members at Ramstein Air Base, Pereira noticed a common theme: soldiers craved the camaraderie and purpose they felt in uniform. Officiating delivers that same team environment—weekly meetings, shared accountability, and a sideline fraternity that “has your back after a bad call.”
How the Program Works
Scholarships cover registration fees, uniforms, and rule-book materials so veterans can start working youth, high-school, or collegiate games at no personal cost.
Since 2017 the foundation has assisted more than 450 active veterans and aims to reach 1,000 officials within the next 18 months.
New outreach now targets transition units on military bases so service members can accumulate on-field experience before separation, stepping into their hometown associations with two seasons already under their belts.
Long-Term Vision
Pereira’s dream is simple: buy a game ticket one day and see a former scholarship recipient calling fouls at the college—or even NFL—level. That moment, he says, will prove the initiative’s full-circle impact: restoring purpose for veterans and easing the nationwide shortage of qualified sports officials.
For aspiring founders, Pereira’s journey underscores two truths:
Identify a genuine community need (veteran reintegration, referee pipeline).
Leverage your own expertise and network to build a sustainable solution.
CAPTRUST salutes Battlefields to Ballfields and invites viewers to read the companion VESTED article, “A Real Game Changer,” for tips on launching a mission-driven nonprofit.
00:01 Public charities and private foundations have a legal and ethical responsibility to honor a donor’s intention for their donations. Understanding best practices in this area can help make the process easier and more efficient.
00:19 Philanthropic donors value the opportunity to direct their gifts. When their input is honored, they feel connected to your organization and are more likely to support your efforts again in the future. But the opposite is true as well. When donors’ requests are not met, they report feeling deceived and are more likely to speak negatively about the organization. This is true regardless of the size of their donation. Clearly, it is in the organization’s best interest to solicit donor direction. But when this process is not handled correctly,
00:48 honoring donor intent can feel unnecessarily restrictive. Here’s an example. What if a donor agrees to fund a single large project, say building a garden, but does not specify what to do with excess funds when the project is complete? While you may think the donor would be happy to support building a playground nearby, the donor may feel differently. Donors want to support your organization, but often the specifics of their gifts are deeply personal.
01:13 The key to navigating these situations is understanding how to balance donor intent with what’s reasonable for your organization. That means matching donor wishes to your mission and having honest conversations upfront. If your organization does not currently have a gift acceptance policy, take the time to write one. For instance, will you accept a real property like a deceased family member’s home? What about cryptocurrency? Revisit this policy regularly to be sure it fits the needs of your organization.
01:42 and complies with the Uniform Prudent Management of Institutional Funds Act, also known as UPMIFA. For large gifts, you’ll want to create a restricted gift agreement. This agreement defines how a gift will be used and gives the organization the right to modify restrictions when they become impracticable or impossible to achieve. A donation may be time-restricted, purpose-restricted, or both. All gift restrictions are legally binding. That means when accepting a gift,
02:12 you must honor the restriction or risk legal action. Ideally, each restricted gift will begin with an open discussion with the donor about what your organization can and cannot do and what would be most helpful to achieve your mission. Even if this conversation results in the loss of a gift, having an honest and respectful relationship is the best practice. It helps you and your donors build mutual confidence and helps the donor gain a deeper understanding about the inner workings of your organization. Of course,
02:40 Having a personal conversation with every donor may not be possible, especially for organizations with thousands of donors. Also, some will be donating after their death. One best practice is to offer donors predefined giving categories that are helpful and reasonable for the organization. For instance, you may let donors designate their contributions for buildings and land, operating expenses, or community outreach. You’ll also want to review granting language for any gift from a trust or estate.
03:10 Finally, make sure to document and track restrictions carefully. Thorough record keeping helps ensure legal compliance and can help your organization navigate any potential changes or removal of restrictions on funds held for its benefit. Want help developing your donor intent practices? Call CAPTRUST and put our experience to work for you.
In times of financial uncertainty, whether personal or market-driven, it’s common for people to react emotionally, but emotional financial decisions are rarely the best ones.
When you have an up-to-date financial plan in place, it becomes much easier to remain invested, tune out the daily noise and focus on your long-term goals. To help prevent you from overreacting during times of uncertainty, crisis or market volatility, CAPTRUST has compiled a 10-part financial planning checklist of considerations. When circumstances arise that make you question your financial footing, this is a good place to start.
Revisit your financial plan and your time horizon for accomplishing your financial goals. Your advisor can help you understand what impact, if any, the uncertainty you’re facing could have on your financial plan in the short and long term.
Confirm that your cash on hand is safe and accessible, and that your emergency fund is sufficient for your short-term needs. We typically recommend three to six months of after-tax income for working people at least 12 months for those in retirement.
Verify that your equity investments aren’t needed immediately and that they will remain invested for the long term. If you decide they are needed immediately, consult with your advisor about possible next steps and tax implications.
Revisit your living expenses. What has decreased, increased, or stayed the same? Taking a fresh look at your cash flow needs and which expenses may not truly be necessary will help you make smart decisions about your monthly budget.
Readdress any investment strategy or portfolio changes you are considering. Rebalance your portfolio if it has strayed from your intended mix. A period of uncertainty may not be the right time to move forward with changes. Or depending on the situation, it could make sense to accelerate those plans. Ask your advisor for perspective.
Confirm that your 401(k) and other retirement contributions are still appropriate to meet your financial goals. Retirement plans can be a very effective way to dollar-cost average into the investment markets. As a reminder, dollar-cost averaging is a practice of systematically investing equal amounts of money at regular intervals, regardless of the price of the security.
Check to see if there are tax-loss harvesting opportunities in your portfolio to offset current or future capital gains. Tax-loss harvesting is a strategy for reducing the total amount of capital gains taxes due from the sale of assets or securities. Your unique circumstances will determine whether tax-loss harvesting is a good idea at this time. Consult with your advisor as well as a tax professional.
If you’ve considered a Roth IRA conversion, market pullbacks may be a good time to revisit those plans.
Check your family’s healthcare proxies, living wills, and other advanced directives to ensure they are still valid and appropriate. Update the documents that need a refresh.
Take inventory of your important documents to be sure that you and your loved ones know where they are stored, preferably with electronic access to digital copies. As part of this step, you’ll want to make sure login information and account passwords are saved somewhere safe, but also accessible in the event that your family needs to access them.
Times of market volatility can be scary for even the most sophisticated investors, but when you feel tempted to make a change, taking or at least considering thoughtful action can help you feel like you’ve regained some control, and it can help you move out of panic mode into more intentional and conscious parts of your brain. CAPTRUST was built to weather all storms and help you do the same, so give us a call today.