Increasingly, employers are introducing automatic features to their 401(k) plans. In traditional 401(k) plans, workers must make numerous choices. With an automatic 401(k), however, workers are automatically enrolled in the plan unless they choose not to participate. This AARP national telephone survey examines the awareness and attitudes of 800 mid-size employers about automatic 401(k) plan features, their reasons for having or not having automatic enrollment, their decision-making processes regarding automating features, and the information they need.
- Most mid-size employers are familiar with automatic 401(k) features. Nine in ten employers are very or somewhat familiar with automatic enrollment.
- Among major reasons for adopting automatic 401(k) plan features, over eight in ten employers that have automatic enrollment say “employees save more for retirement.”
- Nearly four in ten employers that do not have automatic enrollment say they are likely (very or somewhat) to add it in the next year.
- Employers that do not have automatic enrollment most often cite legal issues and cost implications as the two types of information they would find helpful when deciding whether or not to automate their 401(k) plan.
This telephone survey of 800 employers with 500 to 5,000 employees was conducted for AARP by Harris Interactive, Inc. from December 2006 to February 2007. For more information contact the report's author, Colette Thayer at 202-434-6294. (26 pages)