Picking up from the Employee Benefit Research Institute’s 2013 Retirement Confidence Survey, released earlier this month, survey co-sponsor New York Life highlighted the finding that American workers embrace automatic enrollment in workplace retirement plans.
The survey found that if they were automatically enrolled in a retirement plan at a 3% rate, just 11% would opt out; 16% said they would opt out if they were defaulted into the plan at 6%. New York Life noted, however, that it has seen opt-out rates even lower than those. The company said just 5% of participants who were automatically enrolled in a plan opted out.
Mat Greenwald, co-author of the study and president of Mathew Greenwald & Associates, said on a media call announcing the results that “some employers overestimate how many people will be upset” about the rate at which employees are defaulted into a plan, adding that most who default their employees at a higher rate probable haven’t seen a “revolution.”
“A staggering number of American workers aren’t saving for retirement, but the EBRI study shows they are open to new solutions. Nine in 10 employees not saving for retirement acknowledge that they would if their employer auto-enrolled them,” David Castellani, CEO of New York Life Retirement Plan Services, said in a statement.
New York Life suggested increasing participation rates through “auto-sweeps,” which re-enroll employees annually. Over 70% of participants who left a plan and were auto-swept back into it stayed in the plan in 2012. The company said 10% of its clients employed auto-sweeping last year.
Read Half of Workers Believe Comfortable Retirement Out of Reach on AdvisorOne.