Category Archives: Automatic Enrollment

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Rethinking 401(k) Plan Success: The power of deferral rates

From the beginning of 401(k) plans, the retirement industry has focused on the performance of individual funds as the key driver of retirement readiness. But a study by the Putnam Institute in 2006 and repeated in 2012 concluded that increasing deferral rates have the greatest potential impact on a 401(k) participant’s account balance at retirement … Continue Reading

What We Can Learn From Australia’s Superannuation

Superannuation is what Australia calls its retirement system, and they are doing something right. According to the 2014 Melbourne Mercer Global Pension Index (8o-page report if downloaded), an annual study that ranks national retirement systems based on the relative importance of adequacy, sustainability, and integrity, Australia only trails Denmark graded A, and tied with the … Continue Reading

Automatic Enrolment in the United Kingdom: Lessons for the United States

England and America are two countries separated by a common language. –George Bernard Shaw It’s not just the language that separates us and the British. It’s our attitude towards automatic enrollment in retirement savings plans. Spelling aside, automatic enrolment has been the law in U.K. since October, 2012. Here in the U.S., the Pension Protection … Continue Reading

Participant procrastination perils proper pension planning

I’ve seen it first hand with many employees eligible to participate in 401(k) plans. That is, employees who choose not to save for retirement. Sometimes, there’s a logical and personal reason. But sometimes, it’s just … procrastination. And that part of it, I could never understand. But I now have a little more insight thanks … Continue Reading

Treasury issues new Retirement and Savings Initiatives

In a recent series of three Revenue Notices and four Notices the Treasury Department issued Retirement Savings & Initiatives to help Americans save for the future. The new Initiatives: Expand automatic enrollment in 401(k) and other retirement savings plans Create easier ways to save tax refunds Allow unused leave to be converted to 401(k) savings … Continue Reading

Automatic 401(k) enrollment update

Here is a link to my column in the May issue of Employee Benefit news about how automatic enrollment in 401(k) plans boosts 401(k) participation. (Free registration may be required). This is the first of the monthly columns I will be writing for Employee Benefit news – an employee benefit publication which provides free newsletters, seminars and podcasts … Continue Reading

Thinking outside the box to increase low-income employee participation in 401(k) plans

Suppose you’re a plan sponsor that wants to increase 401(k) participation among your low income employees, what do you do? You know, of course, that employee financial education programs by themselves are not enough to influence a change in employee behavior. You might consider automatic enrollment. Automatic enrollment has been shown to raise 401(k) participation … Continue Reading

401(k) auto-enrollment: the shape of things to come

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 … Continue Reading

401(k) automatic enrollment or how to overcome employee inertia

Click to make bigger. Inertia, in classical physics, is defined by Merriam-Webster’s Collegiate Dictionary as: “a property of matter by which it remains at rest or in uniform motion in the same straight line unless acted upon by some external force.” In 401(k) plans, inertia can be defined as many eligible employees never signing up … Continue Reading