Evoshare: The Best Thing Since Auto-Escalation 

Since the implementation of the 401k plan, the retirement industry has developed unique and creative ways to increase participation. Most would agree that auto-enrollment and auto-escalation have provided significant utility by increasing participation and deferral rates, but there is evidence to suggest that new adoption of these initiatives has slowed. A recent 2019 Callan Defined Contribution Trends Survey, found that “The prevalence of automatic enrollment has seemingly plateaued, remaining at around seven in ten plans (70%) for the past three years. Of those that did not automatically enroll employees, less than 5% are very likely to implement this feature in 2019” (see Figure 1). In reviewing data from that same study, a similar conclusion can be made regarding auto-escalation, where only 33.3% of plans that did not previously feature auto-escalation were somewhat or very likely to implement the feature in 2019 (see Figure 2). As new adoption of auto-enrollment and auto-escalation has become stagnant, it’s crucial that we explore new ways to increase savings patterns among plan participants.

Evoshare is the best thing since auto-escalation because it allows participants to automatically accrue additional savings to their 401k by leveraging cash-back from everyday purchases. Evoshare has created a new source of 401k funding by recapturing dollars spent. It’s free money and the consumer doesn’t have to change their spending habits. When individuals make purchases at Evoshare-partnered businesses, either online or at brick and mortar locations, a percentage of their total transaction (up to 20%!) is automatically set aside to be contributed into their 401k account. Evoshare already has 10,000 partnered businesses nationwide including household names like Walmart, Target, and Nike. Each time a qualifying purchase is made, the participant is instantly notified of what their contribution will hypothetically be worth at retirement using principals of compounding interest. In response, retirement plan advisors, plan providers, and DCIOs have begun to incorporate this ‘modern marvel’ into their business models as a new way to increase deferral rates.

According to the How America Saves 2018 Vanguard Study, only 13% of plan participants made the maximum allowable contribution to their 401k. Evoshare helps participants reach their yearly 401k maximum contribution through cash-back from their everyday spending. For those fortunate enough to be able to max out their 401k, Evoshare’s cash-back can be re-directed to a different savings vehicle like a 529 account, IRA, HSA, or even to pay down student loans.

Because new adoption of auto-enrollment and auto-escalation has slowed, it is even more crucial that the retirement industry continues to explore new ways to help participants save more. Incorporating Evoshare’s cash-back strategy into a retirement plan helps better retirement outcomes by converting participant spending into saving. Evoshare has created an entirely new way to fund a 401k and increase deferral rates making it the best thing since auto-escalation.  

Figure 1.

Figure 2.