Auto-enrollment in retirement plans may not contribute to employee retirement savings as much as once thought. Why?
Companies appear to reduce their 401(k) match when they adopt automatic enrollment, according to a recent study by Urban Institute.
Reason: Higher participation rates mean increased costs for employers that have to match worker contributions.
The statistical model developed by the Urban Institute reveals that match rates are 7% lower on average for employers that adopt auto-enrollment.
Has your company considered reducing its 401(k) match to adopt automatic enrollment? Let us know in the Comments Box below.
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