Retirement Autopilot

To do more to help employees save for their future, many employers are incorporating automatic features into their retirement plans. These features can help employees start saving earlier, save in greater amounts and manage their savings more wisely, while also allowing employees to manage their own investments. Studies suggest that automating retirement plans significantly increase the percent of eligible workers who participate in such plans, which increases employees’ retirement savings and financial security.

So what are these automatic features?  And how do they work?

Automatic Enrollment is an automatic contribution arrangement (ACA) that can be used as a feature in a retirement plan to allow employers to enroll employees in the company’s plan automatically upon meeting eligibility requirements. Approximately 30% of eligible workers do not participate in their employer’s retirement plan. Studies suggest that automatic enrollment could reduce this rate to less than 15 percent, significantly increasing retirement savings.

Automatic Escalation is another plan design option which may be added to a retirement plan in conjunction with automatic enrollment.  Automatic escalation allows a plan sponsor to increase participant deferrals annually by a set increment, most commonly 1%. Plan sponsors electing this design feature typically do so to assist their employees with retirement readiness.

Whether you already have a retirement plan or are considering starting one, automatic features offer many advantages.  Learn more about these automation options here: http://www.abgncs.com/AutoFeatures.aspx.

The Author: Abby Murray

Interactive Media Coordinator

www.abgncs.com

info@abg-mn.com