A new study of employer-sponsored retirement plans has found that employee support of automatic 401(k) enrollment is overwhelmingly positive. The "Retirement Made Simpler" study found employees whose companies automatically enrolled them were "nearly unanimous" in their support of the practice.
Specifically, it found that 98 percent of U.S. adults currently enrolled in an automatic 401(k) plan agree they are "glad" their company offered automatic enrollment, according to a press release announcing the survey. Meanwhile, 79 percent expressed "strong agreement" with their employers' practice.
The study also found that 95 percent of adults in automatic 401(k) plans agree that automatic enrollment has made saving for retirement easy and 85 percent agree that it has helped them start saving for retirement earlier than they had planned, according to the release. And just 7 percent of those who were automatically enrolled opted out of the plan.
The study was conducted among 10,130 adults of whom 696 were automatically and are currently enrolled in an automatic 401(k) plan and 48 of whom opted-out of an automatic 401(k) plan offered by their company. It was conducted by Harris Interactive on behalf of Retirement Made Simpler, a coalition formed by AARP, the Financial Industry Regulatory Authority, and the Retirement Security Project to improve the way Americans save for retirement.
"Many employers have been concerned that employees would not like automatic 401(k)s--hence they reported being reluctant to adopt them," said Mary Schapiro, Chief Executive Officer of the Financial Industry Regulatory Authority. "But these results overwhelmingly dispel that myth, making automatic 401(k) adoption a win-win for employers and employees."
"The Retirement Made Simpler coalition hopes that these positive employee experiences with automatic 401(k)s will be the catalyst employers need to implement these plans in their own companies," said Schapiro.
In addition to releasing the study results, the coalition also launched its campaign this week by providing multiple online tools at and information to educate human resource professionals and business executives about automatic 401(k)s and how to implement them. For more information, visit www.RetirementMadeSimpler.org.