Adding Automatic Features to your 401(k) Retirement Plan
As a 401(k) plan sponsor, you have already taken the important step to offer a significant benefit that can help your employees save for their retirement. However, many companies that offer an attractive retirement benefit still find a portion of their employees do not participate in the plan. According to the U.S. Department of Labor (DOL), roughly 30 percent of eligible workers do not participate in their employer’s 401(k) plan.1 Further, even among those who do participate, many are not saving enough. While financial advisors suggest saving 10 to 15 percent per year to achieve a comfortable retirement, the average plan participant does not achieve that level of savings.2
To engage more participants, some plan sponsors are adding automatic features to their 401(k) plans to increase savings and help employees save effectively for retirement. Forty-one percent of large companies offer automatic enrollment and 43 percent of large companies offer automatic increases.3 When asked, participants also say they want these features. According to Plan Sponsor magazine, 71 percent of employees would like to be auto-enrolled into their plan, and 67 percent would like the plan to include auto-escalation.4
Interested in reading about automatic features?
Tell us a little about yourself to learn more:
- Why behavioral economists support automatic features in retirement plans
- How to implement an Automatic Enrollment feature into your plan
- The best ways to communicate new automatic features to plan participants