The number of workplace savings plans with auto enrollment jumped 95 percent in 2006 versus the previous year, Fidelity Investments says, based on its own record-kept business.
Adoption rates are likely to continue rising in the year ahead, the company says, citing a recent Fidelity poll of 400 plan sponsors that currently don’t offer auto programs.
The poll found that 44 percent are considering adding auto enrollment, 27 percent are considering adding an automatic deferral increase feature and 31 percent are considering whether to add lifecycle funds as a default in their 2007 workplace savings plan design.
“Employers are seeing that automatic plans have the ability to get more employees onto a path of greater retirement readiness, which is why plan adoption rates are growing,” says Jeffrey R. Carney, president of retirement services at Fidelity Employer Services Co. “This is a health trend in the defined-contribution industry—and one we strongly support.”
Fidelity, the No. 1 provider of workplace savings plans, had nearly $1.4 trillion in managed assets as of December 31.
Filed by Kathie O’Donnell of Investment News, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.