It’s the New Year, and it’s prediction time. So what’s ahead for employers in 2008? Paul Secunda in his post in The Workplace Prof Blog, 2008 Workplace Trends, points us to Diane Stafford’s predictions in the on-line edition of the Kansas City Star. Paul comments that
These all sound right to me, and I would add that there will be more ERISA class actions by 401(k) account holders, more use of Voluntary Employee Benefit Associations (VEBAs) to deal with the growing problem of retiree health care, and there will be more emphasis on helping employees returning from military service.
I agree, but let me add one more trend for 2008 that I consider an easy prediction to make: more employers adding auto-enrollment for 401(k) plans. The impetus for which is, of course, coming from the Pension Protection Act of 2006. Here are some of the early returns:
- Schwab reports that more than 20% of its Retirement Plan Services clients now automatically enroll employees into a 401(k) plan (a four-fold increase from two years ago).
- New York Life found that 32% of its 401(k) plan clients had adopted automatic enrollment as of September 30, 2007, up from 18% on January 1, 2007.
- A recent Spectrem Group survey suggests that within two years, automatic enrollment will be in place at more than 80% of plans with $10 million or more in assets.
And how do employees feel about auto-enrollment? Very positively based on a recent survey by Retirement Made Simpler, a Washington, D.C.-based coalition that provides resources that help employers simplify the auto-enrollment process. Their survey found that the nearly 700 surveyed adults enrolled in an automatic 401(k) plan, 98% said they were glad their companies offered the retirement plan. But most significant to me was that of those employee who were automatically enrolled only 7% opted out.
Picture credit: The picture above is the album cover from George Benson’s 1968 album, The Shape of Things to Come, the remastered version of which was recently released by Verve Records. This was Benson’s debut album, and Verve says that "Shape of Things to Come is the true signal of Benson’s arrival, not only as a major soloist, but as an artist who refuses to be pinned down four decades later".