More and more, companies are electing to automatically enroll their employees into 401(k) plans. The advantage to this is obvious: in an era where pensions are few and far between for private-sector employees, it’s on the individual to save. And employer-sponsored 401(k) plans are an ideal way to build a foundation for retirement. Companies who elect to auto-enroll employees into a 401(k) have to give the enrollees the option to decline participation. Plan participants also have the option to change their level of contribution, as the IRS notes. For instance, a participant auto-enrolled in a plan contributing six percent toward a 401(k) might decide to set aside 10 percent per pay period instead.
There is data suggesting auto-enrollment could increase retirement savings across the U.S. working population, with the U.S. Department of Labor stating the non-participant rate in retirement plans could drop from 30 to 15 percent simply by automatically electing workers into the plan.
However, auto-enrollment alone isn’t a cure-all for increasing retirement savings, and making sure employees are setting aside more than just a mere pittance is essential, as DailyFinance.com points out. In short, auto-enrollment is just one tool in the plan sponsor’s tool box.
How can you help your employeex meet their long-term retirement goals? It’s easy. Contact a Plexus Financial Services client service team representative by calling 847.307.62222 (Chicago) or by visiting us online at plexusfs.com.
ABOUT PLEXUS FINANCIAL SERVICES, LLC
Plexus Financial Services is located at 21805 West Field Parkway, Suite 300, Deer Park, IL 60010. Securities and advisory services offered through Plexus Financial Services, LLC. Member FINRA/SIPC, a Registered Investment Adviser.
Plexus Financial Services is a CEFEX-certified organization. CEFEX, the Centre for Fiduciary Excellence, has certified Plexus Financial Services to the Fiduciary 360 (fi360) standard, “Prudent Practices for Investment Advisors.”