Employers who implement automatic enrollment for their 401(k) plans often find their plan participation rates soaring. According to a survey reported in the Los Angeles Times, companies that provide automatic enrollment see more than 85 percent of all eligible workers — sometimes more than 95 percent — enrolling, compared with about 70 percent in plans that use traditional "opt in" enrollment.1
Symetra Retirement Plans offer an automatic enrollment option that can help your business clients who face the frustrating problem of low employee participation.
The Concept of Automatic Enrollment
Automatic enrollment changes the employee’s 401(k) decision from “should I participate?” to “should I opt out?” The basic assumption is that it is much easier to keep employees in the plan than it is to get them in the plan.
Higher participation in the 401(k) plan increases the odds that employees will accumulate enough retirement funds so they can actually retire. And by making the initial investment decisions for them, automatic enrollment overcomes employees’ fear of making a poor decision in how much to contribute and where to invest.
Symetra Retirement Plans address the participation concerns of employers by offering an automatic enrollment option and the investment uncertainty concerns of employees by providing a default investment option selected and monitored by the investment pros at Mesirow Financial.
What are the advantages?
- Participants who might not otherwise save are actually saving for retirement.
- The employer automates the enrollment process.
- The plan has improved nondiscrimination test results by reducing the number of non-contributing employees. Evidence indicates a large portion of automatically enrolled employees stay in the plan.
- Employers are better able to meet the ultimate goal of creating retirement benefits for employees.
See Solving a Major 401(k) Problem With Automatic Enrollment for additional background.
Active employees benefit, too
For employees who opt to take a more active role in their retirement planning, Symetra plans feature over 80 investment options, including a diverse set of mutual funds from several leading investment management firms, including Fidelity Management & Research, American Funds, The Dreyfus Corporation, and Franklin Templeton Investments.
Employees also have access to a self-directed online brokerage account through the industry-exclusive ShareBuilder® tool. This allows participants to invest directly in the stock market by purchasing fractional-shares in individual stocks, Exchange Traded Funds (ETFs), or other index products through payroll deductions each pay period.
Symetra provides Fortune 500-style retirement plans for smaller businesses. To find out how to begin offering Symetra Retirement Benefits, please visit www.symetra.com or contact the Sales Center at invest@symetra.com or 1-800-706-0700.
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