A Vanguard Group study found that the Pension Protection Act of 2006 has spurred an increase in employee enrollment in defined contribution retirement savings plans.

More than 300 defined contribution plans the fund company administers use automatic enrollment, triple the number in 2005, when Vanguard last conducted the study.

The plans with this feature, typically sponsored by larger companies, now account for 15% of all Vanguard-administered plans, which cover a third of the company's participant population.

Among the plans with automatic enrollment, two-thirds now feature automatic annual increases in savings rates, up from one-third in 2005.

Vanguard attributes much of this change to the tax and fiduciary incentives for automatic enrollment included in the Pension Protection Act. It said it expects "continued rapid adoption of automatic savings and investment solutions at both the plan and participant level" over the next few years.

"Defined contribution plans have become the most important retirement savings vehicle for private-sector U.S. workers," said Steve Utkus, the head of Vanguard's Center for Retirement Research, which prepared the report. "Helping more people access these plans, encouraging greater savings rates, and providing ready-made, diversified investment portfolios can make a real difference in retirement security."

Mr. Utkus said in a press release that the Pension Protection Act has also fueled an increase in the use of single-fund investment programs, including balanced and life-cycle funds that were among the "qualified default investment alternatives" the Labor Department authorized last year.

By the end of 2007, 96% of the automatic-enrollment plans administered by Vanguard used a target-date retirement life-cycle fund as the default option for new participants. Among all Vanguard-administered plans, 25% chose target-date or life-cycle funds by the end of last year.

Eighty-four percent of Vanguard companies offered life-cycle funds, up from 33% in 2000, the study found. The Valley Forge, Pa., company said more retirement plans are shifting away from static-allocation funds — which require more decision-making on the part of the participant — toward target-date funds.

Nearly six in 10 Vanguard-administered plans offered target-date funds last year. Participants' use of life-cycle funds has increased as well: 34% invested in life-cycle funds last year, compared with 19% in 2000.

Overall participation and contribution rates were unchanged last year, indicating that participants "stayed the course" despite deteriorating economic and market conditions, Vanguard said.

Last year 75% of employees of companies with plans at Vanguard participated in their 401(k) plans, with an average contribution rate of 7.3%. Both figures are essentially unchanged since 2000.

Vanguard, which released the report last week, has more than $400 billion of assets under management in employer-sponsored retirement plans and $239 billion in individual retirement accounts. In all it has $1.25 trillion under management.

It provides record-keeping and investment services to 3 million participants and 1,800 plan sponsors in more than 2,200 defined contribution plans.

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