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How does auto-enrollment affect employer matches?

Two different studies, two different conclusions

By Danielle Andrus | Updated on February 17, 2010

In a December 2009 report, the Urban Institute tried to determine how automatic enrollment would affect employer contributions to 401(k)s. They found that companies with automatic enrollment have an average match rate that is 7 percentage points lower than companies without automatic enrollment. The authors suggest a negative relationship between auto-enrollment and match rates.

Data from the Employee Benefits Research Institute seems to contradict that, however. An advance summary from EBRI states employers who adopt automatic enrollment generally increased the employer match, and in some cases significantly.

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