We are considering amending our 401(k) plan to add auto-enrollment. Would like some feedback from those who have done this, pro and con experiences.
Chief Financial Officer
Main: 404.361.5154 | Fax: 404.965.9355
PO Box 45717 | Atlanta, GA 30320
Thanks for all the feedback, really do appreciate it!
The best decision we have made to increase participation.
I was skeptical but we had approximately a 30% increase in participation.
The opt out rate is not even measurable.
William (Bill) Zobel, CPA, CCIFP
Banks Construction Company
4902 Banco Road | North Charleston, SC 29418
Direct: (843) 377-1000 | Mobile: (843) 371-0703
Paving the Way Since 1948
I audit benefit plans, and have seen this feature activated by many of my clients. The big pro naturally is significantly increased 401k participation, and my clients have been happily surprised by how few folks have chosen to opt out after the fact or lower their percentage. The other benefit on the Company side I have seen is enrollment can be handled during new hire orientation, and HR managers, controllers and CFO's don't have to go back a second time to employees to get them to sign up once their eligible. All of the paperwork is handled once.
I haven't seen any real cons thus far. Hope this helps.
Corey McSweeney, CPA Manager Katz, Sapper & Miller
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202 West Berry Street, Suite 600 Fort Wayne, IN 46802 ksmcpa.com
We rolled out 401K auto enrollment several years ago. Our participation went from approximately 64% to 94%.
We have used VOYA and American Funds platforms to manage our plans. Both firms have handled the implementations, modification and employee notifications to our plan over the years.
Our plan has an auto escalation. Employees enter the plan at 3% with a 1% increase annually. We increased the auto escalation stop from 6% to 10% beginning in 2019.
The employee may stop or change the percentage at any time. We recently add an auto re-enroll for employees who stopped contributions for 12 months or more.
The Miller Group
2649 Production Road
Virginia Beach, VA 23454
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