There's a new standard in 401(k) plans. A survey by Hewitt Associates found that employers are increasingly taking aggressive action to push their employees into good saving habits. Automation and target-date funds, with an increased focus on investment education are becoming the norm in employer-sponsored retirement plans.
|Employers have put their faith in automation in a big way; 58 percent automatically enroll employees into their 401(k) plans. Of those, 69 percent default their workers into a target-date fund, and 47 percent offer automatic rebalancing. The most dramatic increase though, is in automatic contribution escalation – 44 percent of employers offer this tool, compared to 9 percent in 2005.
|Employers aren't necessarily more altruistic, according to Hewitt, by pushing their employees into good savings habits. An increasing number of companies look at engagement and adequate retirement income as a measure of plan success, rather than participation numbers.
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