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Higher Initial Contribution Levels in Automatic Enrollment Plans May Result in Greater Retirement Savings: A Review of the Evidence

by

David John, Public Policy Institute

&

William Shiflett

July 29, 2016

The standard default contribution rate for retirement plans is 3 percent of an employee’s net pay- but is this enough to provide a comfortable retirement? Retirement plan sponsors may be concerned that increasing the default contribution to 6 percent will result in decreased plan participation, but research suggests that similar default contributions do not result in substantially lower employee participation.

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