Nationwide has announced the launch of its Dynamic Default feature, aimed at speeding up the adoption of in-plan protected retirement solutions by allowing plan sponsors to automatically default participants into a protected retirement solution. Eric Stevenson, President of Nationwide Retirement Solutions, stated, "We’re really starting to see a lot more employers become more comfortable offering protected retirement solutions, and we believe offering them through dynamic default will be the next generation of retirement plan auto features."

The implementation of the Dynamic Default feature comes as a response to the increasing adoption of Nationwide’s in-plan protected retirement solutions. The company has seen significant growth in this area, with 6,931 plans offering in-plan protected retirement solutions supported by Nationwide, totaling $4.95 billion in assets under management for 64,372 participants. This marks a substantial increase from the previous year, representing a 565% increase in plans, a 367% increase in AUM, and a 23% increase in participants.

Nationwide's initiative is part of a larger shift in the retirement industry. As Eric Stevenson notes, "Our protected retirement solutions marry some important benefits of both DB and DC offerings to offer plan sponsors next-level retirement benefits and participants the tools they need to retire with confidence." The company aims to address the U.S. retirement crisis and make retirement security a standard for all working Americans.

The City of Columbia in Missouri has already embraced Nationwide’s protected retirement solutions, incorporating the NCIT American Funds Lifetime Income Builder Target Date Series as part of the Dynamic Default feature for its participants. Matthew Lue, Director of Finance for the City of Columbia, highlighted the importance of providing participants with a plan that automatically helps them save for retirement and convert their accumulated assets into protected retirement income.

Nationwide's Dynamic Default feature works by enrolling participants in an initial default fund if they do not select their own investment. As participants age and approach retirement, they will transition to a second default investment, such as a protected retirement solution. Cathy Marasco, leader of Nationwide’s Protected Retirement team, emphasized the importance of managing longevity and market risk for long-term investments, stating, "defaults work. Historically, 8 in 10 participants have entered default options when offered, and 70% remain in that option five years later."

The industry is taking notice of the benefits of in-plan protected retirement solutions. A whitepaper from Ernst & Young highlights how these solutions can boost participants' confidence in retirement planning while also benefiting employers through increased asset retention, participation satisfaction, and employee loyalty.

Nationwide's efforts align with the evolving landscape of retirement planning, as more employees express interest in guaranteed income options. According to Nationwide's 2023 survey, 55% of respondents indicated that 'guaranteed income options' would increase their confidence in their retirement plan and financial investments. Additionally, nearly 9 in 10 employees ages 45+ expressed a likelihood of rolling over their retirement savings into a guaranteed lifetime income investment option if given the opportunity.