Employees are nearly unanimous in their support of being automatically enrolled in their companies’ defined contribution plans, according to a study.
The Retirement Made Simpler study found that 98% of U.S. adults currently enrolled in an automatic 401(k)plan agree they are glad their companies offer this savings vehicle, with 79% of them expressing strong agreement. In addition, of those who were automatically enrolled, only 7% opted out of the plan.
The study also found that 95% of adults enrolled in such a plan agree that automatic enrollment has made saving for retirement easy and 85% agree that it has helped them start saving for retirement earlier than they had planned.
“Many employees have been concerned that employees would not like automatic 401(k)s—hence they reported being reluctant to adopt them,” says Mary Shapiro, CEO of the Financial Industry Regulatory Authority. “But these results overwhelmingly dispel that myth, making automatic 401(k)adoption a win-win for employers and employees.”
The study was conducted by Harris Interactive, on behalf of Retirement Made Simpler(RMS), a coalition formed by AARP, the Financial Industry Regulatory Authority, and the Retirement Security Project.
Click here to read more about auto enrollment in the article Switching to Autopilot from the September issue of Benefits Canada.
To comment on this story, email craig.sebastiano@rci.rogers.com.