Welcome to part one of our four-part series on Plan Design, a complex yet essential aspect of managing a retirement plan. When designed to align with your organization’s goals, it can increase participation, improve outcomes and simplify administration.
Let’s start with automatic enrollment, a powerful plan design feature that can help increase participation and improve savings rates in your retirement plan—when implemented correctly. By setting a default contribution percentage, such as 6%, employees are automatically enrolled, with the option to opt-out or adjust their contributions within the timeframe outlined in their notices.
This approach has become widely accepted, with 90% of employees choosing to remain enrolled when the default rate is 6% or lower. Automatic enrollment can play a key role in helping participants save effectively for retirement, as long as the process is supported by clear communication and efficient administration.
Should you consider automatic enrollment for your plan? Our team is happy to help you evaluate if it’s the right fit for your organization and ensure it’s set up for success.
Curious about the full list of eight considerations for effective plan design? Click here to download the PDF.
