Are you an HR manager, CFO, or business owner who is tired of chasing your employees when it comes time for them to enroll in the 401(k) plan? Do you have low participation rates? Is there always a certain group of employees who never enroll into your plan?

Automatic enrollment can solve these and other problems with regards to employee inertia.

Here’s how it works—once an employee becomes eligible to participate, a notice automatically goes out telling them that in 30 days, they will be automatically enrolled in your plan at a specific percentage of their pay. You can choose between 3% and 10%, but we usually recommend 6% or at least equal to the company match (if applicable).

If you are not using automatic enrollment today, then you are missing one of the easiest ways to save time, money, and effort. One of the best parts about this is you can automate the notification process by using the tools and resources of your 401(k) recordkeeper.

So, does auto enrollment work? Studies show that 70% or more of employees who are automatically enrolled stay enrolled.

Next week, we’ll talk about automatic QDIA and how that can assist employees in their investment decision-making process while protecting you, the plan sponsor fiduciary.

If you’re interested in learning about our entire process for creating a successful retirement plan, make sure you get your complimentary copy of our book, “The Quintessential 401(k).” You can also request a free benchmarking analysis of the strengths and weaknesses in your current plan here.

If you have any other questions about restructuring your current plan, just give me a call or send me an email. I would be happy to help you!