Employers Make 401(k) Enrollment Automatic/Broad Changes Are Suggested for Retirement Savings Plans

About 70 million Americans were enrolled in 401(k) savings plans at the workplace as of mid-2024, according to The Investment Company Institute (ICI). Total 401(k) assets reached an estimated $9 trillion in the third quarter of 2024, compared to $7.2 trillion in mid-2023.

Employers have been changing their tactics in order to encourage more workers to participate in savings plans. The biggest change is that the largest companies now tend to enroll their employees in savings plans automatically, rather than waiting for the employees to request enrollment on their own. (Employees may opt-out but must do so in writing.) This greatly boosts participation, particularly among workers of modest income. Next, employers are providing workers with greater investment plan choices and much better opportunities for education about investing in their plans. Some employers are making it more difficult for employees to make pre-retirement withdrawals from their plans except in cases of extreme hardship. The employer-sponsored savings plan has been a major contributor to the growth in stock investment participation in the U.S.

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Employers Make 401(k) Enrollment Automatic/Broad Changes Are Suggested for Retirement Savings Plans, Business and Industry Trends Analysis

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