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.
Employer adoption of
automatic increase programs rose 26 percent and the use of Fidelity Freedom
Funds as a plan default increased 130 percent, according to Boston-based
Fidelity, the biggest U.S. mutual fund
company.
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 editors@workforce.com.