A rising number of large employers plan to use automated enrollment to assure employee participation in retirement saving plans, a new survey finds.
To encourage workers to accumulate retirement savings, 23% of companies are very likely to automatically enroll new employees in their 401(k) plans by the end of the year, according to the study of 220 large U.S. companies by Hewitt Associates Inc., Lincolnshire, Ill., a benefits consulting firm.
Under automatic enrollment, employees can opt out of a retirement plan but must actively inform their employers they wish not to participate.
To further encourage employee’s retirement savings, 13% of companies say they are very likely to add contribution escalation features, which routinely increase the worker’s contribution periodically unless the employee actively declines to do so. And 20% of employers plan to add automatic rebalancing of 401(k) accounts.
Hewitt found only 6% of large companies are certain their employees will take responsibility for their own retirement future this year, down from 12% in 2005.