The Autopilot Option for 401(k)s
Nearly one in five eligible employees has not enrolled in his/her organization’s retirement plan*. Employees have lots of reasons for not participating, but probably the most common reason is plain old procrastination—they just don’t get around to it.
As reported by a recent AARP article, some employers have taken the wheel to help their employees by putting their retirement plans on "autopilot." Employers automatically enroll new employees in the 401(k) plan as soon as they become eligible. Employers make default choices regarding the amount of pay employees contribute to the plan and where the contributions are invested. Employees must take action if they don’t want to participate or if they wish to contribute a different amount and/or have contributions invested differently.
Learn more about automatic enrollment:
- Read an article written by AARP
- View a short video (MPG: 16 MB) that recently aired on American Airlines' InFlight Journal. (Please note, the video may take a couple minutes to load.)
To learn more about automatic enrollment services offered by the Principal Financial Group®, contact your representative today or call 1-866-467-2285. Certain state payroll laws may conflict with your ability to offer this provision, please contact your attorney or tax professional for advice.
* EBRI Retirement Confidence Survey, 2005
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