Retirement Made Simpler News
February 15, 2010

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In the News

IRS Notices Focus on Auto Enrollment

The IRS has issued two recent notices related to automatic enrollment.

• Automatic Enrollment in SIMPLE IRAs provides guidance to facilitate automatic enrollment in SIMPLE IRA plans, including questions and answers relating to the inclusion in a SIMPLE IRA plan of an automatic contribution arrangement. IRS Notice
  
  
• Adding Automatic Enrollment to Section 401(k) Plans — Sample Amendments facilitates automatic enrollment by providing two sample plan amendments for sponsors, practitioners, and employers who want to add certain automatic contribution features to their 401(k) plans. IRS Notice

Employee Focus: This Simple Switch Could Save Your Retirement

As tough as times have been for workers trying to save for retirement, there's at least one piece of good news. Increasingly, employers have taken matters into their own hands, by automatically signing up their employees to participate in company-sponsored retirement accounts. It might seem insulting that your employer would sign you up for a 401(k), instead of asking you to do it yourself. But the sad truth is that when it's up to us to take action, many of us don't—and our futures suffer for it. Motley Fool

Want News about Automatic 401(k)s and more? Visit the RMS Media Stream

Research and Resources

Survey Reveals Most Companies Planning to Restore 401(k) Match in 2010

Many U.S. employers are increasingly losing confidence in their workers' ability to save for retirement and, as a result, plan to step up their efforts this year to help workers maximize their 401(k) savings, according to a new survey by Hewitt Associates. The survey found that employers, to assist their employees, are considering the following:

• 80 percent of companies that suspended or reduced their company match in 2009 are planning to restore it in 2010.
• 59 percent of employers offer automatic enrollment, up from 51 percent in 2009. Among those that do not currently offer the feature, more than one-quarter (27 percent) are very or somewhat likely to add it in the coming year.
• Almost half (46 percent) of employers that do not already offer automatic rebalancing—a tool that helps employees regularly balance their portfolios with their target allocations—are very or somewhat likely to add it to their plan in 2010.
• Nearly four in ten (38 percent) are very or somewhat likely to add automatic contribution escalation—where employees can elect to have their contribution rates increased automatically over time.

Resources on RetirementMadeSimpler.org

Automating your 401(k) can help your company with three important concerns.

• Your employees can save more for retirement
• Employee satisfaction can increase
• It can be easier to pass nondiscrimination testing

Who has automated their 401(k)? Check out the RMS Automatic 401(k) Directory

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