Although helping employees save for retirement was far and away the No. 1 reason employers mentioned (74%) for adding auto-enrollment to their retirement plans, there are two other reasons why it’s popular:
- Including auto-enrollment makes it easier to pass non-discrimination testing (49%), and
- It shows they are socially responsible (35%).
The findings came from a large national phone survey by Woelfel Research, Inc.
Many still not buying in: Here’s why?
Despite those benefits, about half of all employers haven’t added auto-enrollment to their 401(k) plans. Why not? The biggest concern was how employees would react to an auto-enrollment feature.
The top reasons for not adding auto-enrollment:
- We are concerned employees wouldn’t like the feature (30%)
- Added costs (20%)
- We are content with how our plan is currently performing (14%), and
- We don’t have enough information (10%).
On the fence?
Not sure whether adding auto-enrollment would be a hit with your workforce? Consider surveying employees to see if the feature would be something they’d like.