A well-designed enrollment plan, including auto enrollment, has been shown to both participation rates and contribution rates. These plans work well, many believe, because it reduces the number of decisions an enrollee must make to finalize the enrollment process. Nearly half, 47%, of plans under Bank of America Merrill Lynch’s management have at least some auto enrollment features built into them.
According to Bank of America Merrill Lynch data, auto enrollments were up 22% in 2015, contributions from auto enrollment employees were up 21% and employees taking advantage of automatic increases in contributions rose 23% in 2015.
For more information on ways to increase 401(k) participation rates, see our new article this Thursday.