Auto-enrollment of participants in 401(k) plans is likely to be most beneficial to young and low-income workers, according to new research.

The research, by the Employee Benefit Research Institute, confirmed earlier findings that large employers adopting auto-enrollment have significantly increased the employer “match” to their workers’ own 401(k) contributions.

EBRI’s research notes that this may result from large employers providing a “quid pro quo” to their workers in return for either freezing or closing their defined benefit (pension) retirement plan.

Automatic enrollment of participants in 401(k) plans, which was encouraged by provisions in the Pension Protection Act of 2006, is designed to overcome some of the drawbacks of voluntary enrollment by getting more workers to save in their workplace retirement plan. Auto-enrollment for 401(k) plans has been demonstrated by previous EBRI research to have substantial potential benefits for some employees.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access