At the height of the financial market meltdown in 2008, Leviton — a global manufacturer of electrical wiring equipment — became concerned about employees going into panic mode and either stopping contributions to the company’s 401(k) plan or, even worse, withdrawing money that was already in the plan. It was during that time the company, which has 10,000 employees worldwide, started thinking about auto-enrollment.

Today, participation in Leviton’s 401(k) plan is 84%. Fran Ruderman, vice president of HR for Leviton, attributes the participation success to a three-pronged approach: auto-enrollment, auto-escalation and access to personalized saving and investing advice.

“I don’t see it as paternalism,” she says. “People get busy in their day-to-day activities and when you leave it up to someone they don’t get it done, even though they want to. If anything, we’ve eliminated the barrier for those individuals who want to participate but just don’t enroll.”

The average participation rate for plans using all three approaches that Leviton does is 76%, according to Bank of America Merrill Lynch’s quarterly scorecard of 401(k) contribution activities, released today. The average participation rate for plans using none of those services, meanwhile, is 50%.

Year over year, Bank of America Merrill Lynch has seen a 10% increase in the use of auto-enrollment among its employer-clients, with nearly 90% of all participants who were auto-enrolled in their plan actively contributing. There’s also been a 23% increase in the use of auto-increase and a 13% increase in the number of employers offering the bank’s advice access service.

“When auto enroll was first put in place, there was a question as to whether it would work,” says Kevin Crain, head of institutional retirement and benefit services for Bank of America Merrill Lynch. “The good news is, all the evidence points to that it does work. Very few people opt out.”

Still, employers who offer an employer match in their 401(k) may question whether auto-enroll is worth the extra cost. Crain says there are plan design considerations that can be looked at to deal with this concern. “You can structure your match in different ways – lengthen out the time that people can get it from a vesting perspective or the structure of the match itself,” he says.

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