7 Images Total
1. Our employees will resent the perceived loss of control over more of their paycheck.
The concern about upsetting employees is the most common objection to adding auto features to a retirement plan, says Stephen Moser, a consultant with RetireAdvisers Services. But, he says, according to a Harris Poll conducted in 2007, 98% of those currently automatically enrolled agreed with the statement, You are glad your company offers automatic enrollment.
2. If too many new participants join the plan, the match will become too expensive.
Adding auto features to an employers plan may not be as expensive as they think, Moser says. Most of an employers higher paid employees are already in the plan and contributing aggressively, so its mostly the lower-paid employees who will be auto-enrolled. As a result, the match will be based on percentages of those lower salaries only, he suggests.