Even though an automatic salary deferral rate of 3 percent into an employee's 401(k) is not enough to get them where they need to be in retirement, most companies are not poised to raise their initial default rate above that figure.
David Wray, president of the Plan Sponsor Council of America, says that the "3 percent initial default rate for automatic enrollment seems to be pretty steady. They've been doing this a long time. Companies that were defaulting at less than 3 percent are now coming up to 3 percent."
He added that, "we don't see the trend of people moving from 3 percent forward. What they are doing is escalation instead. You could automatically enroll people at 6 percent. That's exceptional, but I don't see it trending in that direction."
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
