Defined terms for the annuity market and lifetime income landscape.
Automatic enrollment is a defined contribution plan design feature that enrolls eligible employees in the plan by default at a specified contribution rate, with the employee retaining the right to opt out or change the rate at any time.
Automatic escalation is a defined contribution plan design feature that increases a participant's contribution rate on a scheduled basis — typically annually by a stated percentage — with the participant retaining the right to change the schedule or opt out at any time.
The availability heuristic is a decision shortcut in which the probability or importance of an event is judged by how easily examples of the event come to mind, so that vivid, recent, or emotionally charged instances carry more weight than statistical frequency would justify.
