According to Kiplinger Business Resource Center, a recent Hewitt survey finds a growing number of firms offering 401(k) plans are “automatically enrolling employees in the plan, automatically increasing worker contributions and sometimes even automatically rebalancing their accounts so they are not overexposed to any particular type of investment. Employers are also searching out lower-cost funds to reduce fees and offering more investment advice to workers.”
Hewitt surveyed 190 mid- to large-size companies and also found that while automatic enrollment in 401(k) plans increased worker contributions, workers still were not actively involved in handling their own accounts. Thus, the survey found, many companies were also defaulting workers into diversified investment options, opting for higher default contribution rates, and combining automatic enrollment with contribution escalation features.
Additionally, Almost 75 percent of companies that offer a pension plan told Hewitt they will make no changes to those plans in 2008, compared with 41 percent last year.