Automatic enrollment continues to grow in popularity, a new study by Deloitte finds.
The 2015 Deloitte Defined Contribution Benchmarking Survey shows that the number of employers whose plan includes an automatic enrollment/negative election feature stands at 62% and growing; 40% satisfy the safe harbor conditions under the Pension Protection Act in the process. And almost all of those that do have the feature — 97% — are satisfied with it.
Strong majorities reported that automatic enrollment helped increase participant awareness (64%), the average contribution rate (70%) and the plan participation rate (88%). And 62% provide step-up contributions, which are being taken advantage of by an increasing number of participants. Opt-outs, the report says, are declining.
There is a slight gap between median actual deferral percentages of non-highly compensated employees and highly compensated employees, registering at 5.9% and 7%, respectively.The most common default deferral percentage for automatic enrollment is 3%, as it was in 2013-14.
