FOR IMMEDIATE RELEASE:
June 2, 2010
Contact: AARP Media Relations, email@example.com, 202-434-2560
Employees Continue to Face Barriers to Saving for Retirement in the Workplace
New AARP Research Shows Majority of Employers Have Not Adopted Automatic Features In Their 401(k) Plans
WASHINGTON –A new AARP survey released today found that employers with at least 500 employees remain hesitant to adopt automatic enrollment features in their retirement savings plans and automatically enroll their employees. An overwhelming majority of employers—nearly 60 percent—report that they have not adopted automatic enrollment in their 401(k) plans although most are aware of this feature and its potential benefits including helping employees save more for retirement.
“Too many employers are not taking advantage of a simple, effective and popular tool to help their workers save for retirement,” said Michael Herndon, Manager of Financial Security at AARP. “Despite concerns to the contrary, research shows that employees overwhelmingly appreciate participating in an auto enrolled retirement savings plans, which could provide a competitive edge to employers who want to recruit and retain the best possible workforce.”
Employers surveyed cited a number of reasons for not adopting automatic enrollment in their 401(k) plans, including:
* a concern that employees would not like automatic enrollment (20%),
* concern about costs (20%),
* contentment with the status quo (14%), and
* a lack of information (10%).
AARP, along with FINRA and Retirement Security Project, created Retirement Made Simpler in 2007 to address many of the concerns employers expressed. The program aims to provide employers all the tools necessary to help their employees save more efficiently, including information on the basics of automation, legal and liability issues and best practices when deciding to automate 401(k) plans.
“The good news for employers is that auto enrollment is easier – and more popular – than you think," said Herndon. “Retirement Made Simpler, has created step-by-step tool kits, gathered research and resources to help employers get started today.”
Only 16 percent of employers who currently do not have automatic enrollment features reported that they would be likely to add it in the next year. AARP encourages employees at organizations of all sizes to speak up and talk to their human resources representative and request automatic features in their savings plan.
“Employers have a tremendous opportunity to help employees start saving for retirement and there are many resources available to help simplify this process,” said Herndon.
To view the full report, visit: http://www.aarp.org/work/retirement-planning/info-06-2010/auto401k.html.
Employers seeking more information about how to automate their retirement savings program can visit: www.retirementmadesimpler.org.
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