What is a collective trust fund?
A collective trust fund is a pool of institutional assets. These funds tend to have higher asset requirements (over $5 million per strategy) than traditional retail mutual funds, but generally offer lower expenses. The migration of plan sponsors away from traditional mutual funds to collective trust funds has been slow. What percentage of participants enrolled in plans with an automatic enrollment feature opt out? There are a number of different percentages out there, but we think it is safe to assume that opt out rates are normally under 10 percent. What we have been hearing recently from plan sponsors is that, given the state of the economy, some participants have been lowering their deferral rates, yet not taking the more drastic step of opting out. What is the potential that the government will require auto enrollment with some sort of mandatory employer match? In the current environment, we do not think it would be politically viable for Congress to mandate any kind of automatic e
