October 18, 2011
--- The results from Diversified’s Report on Retirement Plans – 2011
show nearly one-half (48%) of larger companies have implemented
automatic enrollment, and an additional 36% are considering implementing
this feature. ---
According to the survey, the adoption of automatic enrollment is most
prevalent in larger companies with 10,000 employees or more (57%
compared to 48% overall).
Sponsors look to other automatic features to varying degrees to
help employees achieve a funded retirement. For example, while less
common than auto enrollment, automatic deferral escalation is in place
among one-third of plan sponsors, with another third currently
considering such a feature. Automatic account rebalancing is expected to
grow at nearly the same rate as automatic escalation (36%).
To further enhance participation rates, a growing percentage
(58%) of plan sponsors periodically re-enroll employees who originally
opted out. “This approach ensures that all employees will be
systemically offered an automatic enrollment opportunity,” Diversified
Vice President Laura White explained in a press release. “That strategy
can be helpful to the 37% of plan sponsors who state that their primary
goal in offering a defined contribution is to help employees accumulate
income for retirement.”
Another 41% maintain their plans to retain employees—but only 14% use their plan primarily as a tool to recruit employees.