Effective January 1, 2004 Save Smart, variations of which have been tried and tested by larger companies that sponsor 401(k) plans, will be available across the gamut allowing participants to increase their contribution levels by 1%, 2%, or 3% each year, up to the maximum they want to save, as well as select the month in which they wish the increase to occur, according to a news release.
“We’ve found that when employees sign up for a 401(k) plan, they often fail to go back and increase their contribution levels even when they are financially able and willing to do so,” said Kendall Kay, Vice President, Marketing, Strategic Planning and Business Development for ADP Retirement Services. “Save Smart puts employees in control by allowing them to determine when and by how much they will increase their contribution levels. This increases their comfort level as employees can allocate a portion of their future pay raises toward their retirement savings without noticing much of a difference in their take home pay.”
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