This change to your 401(k) plan could increase your retirement savings

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A growing number of companies automatically take money from their employees paychecks and deposit it into a retirement account — even after a worker has opted out.

div > div.group > p:first-child"> A growing number of companies direct money from their employees paychecks to a retirement account — even after a worker has said"no, thanks."

But while many employers auto-enroll their employees one time — typically when they first join the company — some are now doing so again and again, hoping to wear down those prone to ditching. Each year, Plan Sponsor Council of America, a trade group for employers, studies the state of 401 plans. In 2018, it found that nearly 8 percent of the plans automatically re-enrolled employees who were not participating. In 2013, just 4 percent did so.

Around 13 percent of the employers that work with Fidelity have added a"re-solicitation" feature, in which non-participating employees are brought back into the plan at some point, according to Katie Taylor, vice president of thought leadership at Fidelity. Seven percent of employers make that re-enrollment an annual ritual.

 

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