A new study from American Century suggests sponsors may be speaking out of bothsides the their mouths.

Overwhelmingly, sponsors say it is very important to supportparticipants’ quest for a secure retirement. Of the nearly 500sponsors American Century surveyed—none had more than $250 millionin plan value—91 percent say they are conscious of employees’retirement readiness.

Yet only 36 percent of sponsors said they actually test theirplan for retirement readiness.

For the most part, sponsors are confident they are doing a“reasonable” job when it comes to optimizing plan design—89 percentgave themselves a passing grade.

But that general confidence may not square with participants’expectations.

American Century’s study, which was conducted last year but justreleased, shows that seven in 10 participants think sponsors shouldbe automatically enrolling them at a deferral rate of 6 percent.Yet only 48 percent of the sponsors polled have anyautomatic-enrollment plan in place.

Moreover, 70 percent of the more than 2,000 participantssurveyed said they were at least “fairly interested” in an annualautomatic-escalation of 1 percent. That suggests employees are opento a more paternalistic approach to prepping for retirement. Ifthat is the case, sponsors have yet to get the memo: 70 percentsaid they do not incorporate automatic-escalation in plandesign.

Diane Gallagher, vice president of practice management atAmerican Century, said record keepers have the resources to trackindividual retirement readiness figures, andencouraged plan advisors to work with sponsors to better understandparticipants’ readiness in order to gauge the overall health of theplan.

“Even with those projections just covering assets in theemployer-sponsored plan, doing so would at the very least provide asnapshot of individual progress,” said Gallagher in an emailstatement.

“By considering replacement ratios, the team can considerprogressive defaults in plan design to continue to move the ratiosup,” she added.

In 2013, the Department of Labor proposed a new rule that wouldrequire lifetime income illustrations in 401(k) account statements.A finalized rule has since not emerged.

And in a study published in March of 2016, the Government Accountability Officerecommended the DOL provide additional tools and guidance onretirement income replacement rates, for the purpose of modifyingplanning tools to accommodate better savings outcomes. DOL agreedwith the recommendations in GAO’s report, and said it is planningto provide new replacement rate tools by June 2017.

Many private sector providers are not waiting for regulators toact. Numerous record keepers and managed account providers haveadded income replacement rate calculators in the latest versions oftheir platforms.

Clearly, retirement plan providers will be instrumental in cuingsponsors to the latest replacement rate estimating tools. Nearlyeight in 10 of the sponsors surveyed in American Century’s studyreport working with a plan advisor; two-thirds said they were “verysatisfied” with advisor performance; another 33 percent said theywere “somewhat satisfied.”

Yet despite general satisfaction levels with advisors, half ofsponsors in the survey have not even deployed anautomatic-enrollment feature, and only 30 percent deployautomatic-escalation; almost half of sponsors said they haven’teven considered the latter.