The Pension Protection Act helped reshape retirement plans and aimed to improve participant outcomes. As policymakers continue working to expand access, focus is increasingly turning to helping participants navigate retirement with confidence.
Quick takeaways
Twenty years ago, retirement policy focused on a clear challenge: helping more workers participate in workplace retirement plans and save for the future. PPA helped address that challenge by supporting plan designs that made it easier for employees to enroll, save, and adopt diversified, age-appropriate investments for retirement using the plan’s QDIA.
The impact has been significant. Automated features have helped increase participation and savings rates across workplace retirement plans, while subsequent legislation has continued to expand access to retirement savings opportunities.
But the work isn't finished. Expanding access to workplace retirement plans remains an important priority for policymakers, particularly among workers employed by smaller businesses and organizations that have historically been less likely to offer retirement benefits.
At the same time, a new challenge is emerging. As more participants accumulate retirement savings, employers, service providers, and policymakers are increasingly focused on helping workers turn those savings into retirement income and financial confidence. In many ways, the next chapter of retirement policy may be defined not only by helping people save for retirement, but by helping them turn those savings into sustainable retirement income and make informed financial decisions throughout retirement.
Before the PPA, retirement plans largely relied on participant action. Employees needed to enroll, decide how much to save, and select investments on their own. The legislation helped remove many of those barriers by supporting automatic (auto) enrollment, auto-increases, QDIAs, and creating a simpler path into retirement savings.
The results have been considerable. Plans with auto-enrollment have participation rates that are 37% higher and are twice as likely to reach 90% or higher participation. Plans that also incorporate auto-increase have average contribution rates 44% higher than plans with auto-enrollment alone. Additionally, 95% of participants who are automatically enrolled remain in the plan.
The success of these provisions also helped reinforce an important policy lesson: plan design matters. The PPA demonstrated that thoughtful policy and behavioral finance principles can encourage positive participant behaviors without requiring employees to become retirement experts.
Building on that foundation, the SECURE Act and SECURE 2.0 sought to address another persistent challenge—access. Tax incentives were expanded to encourage retirement plan adoption among small businesses, while auto-enrollment and auto-increase requirements were included for newly established plans. Together, these changes reflect a continued policy focus on expanding workplace retirement coverage and increasing participation.
While expanding access remains a critical policy objective, the next era of retirement legislation will likely focus on helping to deliver individualized retirement outcomes.
Auto-enrollment and QDIA helped address a common challenge by creating a clearer path into retirement plans. Retirement readiness is different. Participants approach retirement with varying levels of savings, income needs, healthcare considerations, family circumstances, and personal goals.
As a result, helping participants prepare for retirement often requires more than simply encouraging participation or increasing contribution rates. It requires helping individuals understand how their accumulated savings can support the retirement they're trying to achieve.
This shift reflects a broader evolution in retirement policy. If much of the last two decades focused on helping participants accumulate assets, the next phase may increasingly focus on helping them use those assets effectively throughout retirement.
Recent legislation, including the SECURE Act and SECURE 2.0, reflects growing interest in retirement income solutions, portability, and support for participants throughout retirement.
At the same time, participants’ expectations are changing. Nearly 60% of participants say they're interested in a managed account service, while almost half are willing to share personal information in exchange for more tailored guidance. Yet 64% report not receiving financial advice.
For employers, this creates an opportunity to provide support that reflects an individual's age, savings progress, retirement goals, and projected income needs. Personalized guidance may help participants move beyond simply accumulating assets and toward understanding how those assets can support their lifestyle in retirement.
The next chapter of retirement policy may be shaped more by efforts to help participants achieve retirement security. For plan sponsors, that could mean expanding the definition of retirement readiness beyond participation and savings rates to include personalized guidance, retirement income strategies, and tools and resources that help participants make informed decisions throughout their retirement journey.
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