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Re-enrollment effective in boosting 401(k) participation

The most effective and immediate way to get 401(k) plan participants to improve their deferral rates is to re-enroll them into the plan, according to a report by Fred Reish of Drinker Biddle & Reath.

By Paula Aven Gladych | Updated on March 14, 2012

The most effective and immediate way to get 401(k) plan participants to improve their deferral rates is to “re-enroll” them into the plan, according to a report by Fred Reish of Drinker Biddle & Reath. Re-enrollment means that the plan fiduciaries would restart the plan from an investment perspective. To do that, the plan would notify participants of at least 30 days that they will be required to redirect their investments by set date.

They could leave their investments the same or pick new investments. If they do nothing, their plan assets would default into a qualified default investment alternative, such as a target-date fund.

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