Here’s more proof that fear can spark misguided retirement-planning decisions:
Fewer than half (42%) of large companies have the auto-enrollment feature in their 401(k) plans, according to a study by Woelfel Research.
The top two reasons why the others don’t?
- Fears that employees wouldn’t like auto-enrollment (66%), and
- Fears that employees would find it confusing (52%).
So more than half of big firms avoid auto-enrollment – a feature that’s growing in popularity – based on presumed fears!
Studies show that most people want to put a portion of their income into an employer-based retirement plan. But they delay starting a 401(k) due to paperwork hassles or because they “forgot.”
You may want to advise your company clients that don’t use auto-enrollment to survey their employees about it.
For example: a simple e-mail explaining what auto-enrollment is, followed by a “Like it/Don’t like it” question.
People may not like it. Or they make think it makes sense. Either way, better to make a decision based on what people really think rather than what a company’s CFO or benefits manager assumes employees think.
What do your company clients think about auto-enrollment? Please leave a comment below.