More big companies than ever are automatically enrolling workers in defined-contribution retirement plans, according to a recent survey. The goal of automatic enrollment is to encourage savings despite worker inertia or indecision.
The survey of 333 large U.S. employers — representing 10 million workers and $775 billion in retirement assets — found that 68 percent of the companies automatically enroll workers in 401(k) plans, up from 58 percent in 2015. The survey was conducted by Alight Solutions, which provides information on benefits, health and human resources.
Many companies also are gradually moving workers toward higher levels of savings. About one-third of the larger companies surveyed said they automatically put workers into plans at a savings rate of 6 percent of pay or more.
“Companies realize that they need to make it easier for their people to save for retirement, whether it’s simply getting workers into the plan or helping them save even more,” said Rob Austin, director of research at Alight. “Automatic features harness the power of inertia by taking the workers who may not take action and making sure that they begin to save today for retirement. This helps increase the chance that more people will be on a favorable path to a more secure financial future.”
The survey also indicated that more companies are adding tools to help workers make good investment choices. It found that 61 percent of companies provide one-on-one financial counseling, up from 22 percent in 2007.