In addition to the more than 20% of Schwab’s Retirement Plan Services clients now automatically enrolling employees into a 401(k) plan (a four-fold increase from two years ago), Schwab said in a news release 45% of plans it administers are automatically selecting investments by age for participants using target-date funds. Nearly 25% of plans that moved to Schwab in 2007 automatically mapped all plan participants into target-date funds.
Nearly 95% of Schwab Retirement Plan Services clients offer participants annual automatic deferral increases up to a pre-determined amount, the press release said.
Additionally, Schwab found automatic enrollment seems to be helping participants save for retirement. In 2007, 93% of automatically enrolled participants have remained in retirement plans administered by Schwab.
“The number of our clients choosing to offer different automatic plan features continues to grow very rapidly,” said Clare Bergquist, Charles Schwab director of 401(k) strategies, in the press release. “Today’s employers are going the extra mile to help ensure their employees are doing all they can to save enough for retirement.”
The options chosen by plan sponsors are selected from Schwab’s menu of automatic features, called Schwab Retirement Smart Steps.
A recent study found employees offered plans utilizing auto features are showing significantly greater participation rates, increased savings and more diversified investment allocations (See Auto Features Significantly Impact DC Plans ).