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November 2008

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What your competitors are doing: 401(k) plans

These days, calming employees’ fears about the economy is a must for recruiting and retaining workers.

A key part of that is getting workers comfortable with their retirement funds.

When it comes to retirement plans, one main goal is making it easier for employees to join and remain in the employer’s 401(k) program, according to a recent survey by Deloitte Consulting.

Here’s what companies are doing to increase participation:

42 percent automatically enroll employees as soon as they’re eligible. That’s almost double the number

of companies that used auto-enroll last year (23 percent).

15 percent use an “easy enrollment” process, like having employees fill out a postcard or other simple form that can be completed quickly. That number’s up from 11 percent last year.

48 percent have stopped making employees wait and let them start saving when they get their first paycheck.

68 percent of companies use a default rate of 3 percent of the employee’s salary. Last year, only 53 percent had a default rate that high.

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