Auto enrollment is a relatively new idea to businesses. Once hired after the probationary period employees are automatically enrolled into the company’s 401K Plan.
As no surprise this practice does increase employee participation in retirement plans. A recent study by Towers Watson found that the share of employers with more than 80 percent participation rates in defined contribution plans increased from 50 percent in 2010 to 64 percent in 2014 as the share of companies offering automatic enrollment rose from 57 percent to 68 percent.
But the good news stops there. Employees participating in auto enrollment tend to contribute less than people who sign up for 401(k) plans on their own, often because their employers set a low default contribution level.
There has to be a buy in from the staff, they have to see the benefit. This is where communication should be coming into the picture. But is not…