Automatic enrollment in Your Company’s 401k

Today nearly 20% of large U.S. businesses are automatically enrolling employees in 401k plans as opposed to making them sign up on their own, according to new research from Hewitt Associates. Some companies are even going so far as to eliminate the money market as the default choice. Opting instead for lifecycle funds with automatically reallocate holdings among different asset classes as an employee ages. I applaud corporations for making it easier to help employees get the ball rolling in the savings arena. J.C. Penney saw participation in the company’s 401k plan surge to 85% from 71% in about 18 months after it began automatically enrolling workers! The full article is available at www.wsj.com (subscription required) in the Personal Journal section.

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