A Seligman news release said that plan sponsors can choose to have all eligible employees enrolled in the plan unless employees affirmatively opt out. Sponsors can also set automatic annual increases in deferral rates.
“It is increasingly clear that most people are not sufficiently prepared for retirement, and automatic enrollment is a great opportunity to show to employees who otherwise might not sign up that salary deferrals are a relatively painless way to save,” said Paula Smith, senior vice president of Seligman Advisors, Inc., in the news release “This is a terrific opportunity for plan sponsors to improve participation rates and make saving for retirement easier than ever for employees,” she added.
To complement the automatic enrollment feature, Seligman includes automatic asset allocation using Time Horizon Matrix. The Matrix suggests a diversified portfolio of investments based on the number of years remaining until the individual’s retirement goal. Then, portfolio weightings are automatically shifted each year to historically less volatile asset classes, according to the announcement.