Since the Pension Protection Act of 2006, automatic enrollment and automatic contribution rate increases have become more common in plan designs as employers have looked for ways to help employees save for retirement. In fact, many surveys indicate that more employers are embracing these features as a way to help drive participation and savings rates.
While automatic features have helped participation and savings rates in plans, the concern is around the fact that low default rates plans started with can result in low savings rates. Another concern is many employers applied the automatic features to only new eligible employees and employers did not embrace the automatic contribution rate increase feature.
