The U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) have released a new publication to help small employers better understand automatic enrollment for 401(k) plans offered to their employees. The publication, entitled “Automatic Enrollment 401(k) Plans for Small Businesses,” provides a comprehensive overview of the advantages of starting and operating this type of 401(k) arrangement.

While more and more smaller businesses are offering retirement plans, defined contribution schemes have yet to gain a significant foothold in the this segment of corporate America. Many small employers have hesitated to bring such plans on board because of the expenses that plans in general and automatic enrollment in particular entail. In the current economic environment, those doubts are likely to be even stronger, says Fred Barstein, president and CEO of Green Acres, Florida-based 401kExchange.

“One of the inhibitors for any business, particularly small businesses, looking to incorporate automatic enrollment is the requirement for a corresponding match,” Barstein says. “In today’s economic environment, a match is even hard for big companies and extremely tough for small ones.”

But Barstein still feels that smaller companies ought to bite the bullet and look toward automatic enrollment in the long-term, even if it requires both commitment and expense in the short-term, as “it is the right thing to do.”

For millions of Americans, 401(k) plans are now the primary source of retirement income and automatic enrollment is going to play an important role in helping them save and invest for their retired years. The DOL/IRS publication describes what an automatic enrollment 401(k) plan is; details how to set up the plan, how to manage it, what kind of fiduciary responsibilities it entails and also provides a checklist to ensure compliance with the law.

The publication is part of the DOL’s ongoing education campaign to educate employers, particularly small businesses, and help workers and their families to save for a financially secure retirement.