Two-thirds of employers are using automatic enrollment in their 401(k) plans or plan to start using it in the next 18 months, according to a survey conducted by Wells Fargo & Co.'s employee benefits consulting group in Minneapolis.
The survey, conducted from early April through the end of May and released last week, also showed a dramatic shift over the last year in the investments into which employees are enrolled automatically.
The 2007 Strategic Initiatives in Retirement Plans Survey, which includes responses from over 350 employers, found that the percentage of companies that enroll new employees automatically in their retirement plans increased nearly 70% over the last year.
Many companies appear to be following proposed guidance from the Department of Labor that encourages employers to select a default investment vehicle with a blend of stocks and bonds.
In the last year the percentage of plans using automatic enrollment with a more conservative default fund fell by over a third, to 39%. These investments are typically replaced by target date funds. The percentage of plans using these funds nearly tripled, to 39%.
