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Retirement Made Simpler News
July 20, 2010
Each issue of Retirement Made Simpler News delivers important news, research, updates and more to your inbox. Meet the Organizations
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Automatic 401(k) in the News
Retirement Made Simpler Comments on AARP Survey about Employer Views on Enrolling Employees in Auto 401(k) Plans
Retirement Made Simpler (RMS) pointed to the results of coalition partner AARP’s survey of more than 800 large companies as evidence that automatic 401(k) features are gaining recognition and acceptance. The survey, which was partially funded by RMS, also underscores that additional education and information are needed to help companies overcome barriers to adopting automatic enrollment, particularly automatic enrollment of all employees.
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The EBRI Retirement Readiness Rating: Retirement Income Preparation and Future Prospects
Retirement plans are helping more workers pave the way for a secure retirement today than in 2003, according to a new study by the Employee Benefit Research Institute (EBRI). Improvements in retirement plan design, including automatic enrollment and diversified default investments in 401(k)s, were singled out as having led to increases in participation rates, earlier account accumulations, and better long-term retirement preparation prospects. Still, many workers are projected to run out of money during their retirement years.
The EBRI baseline 2010 Retirement Readiness Rating finds that:
- Nearly one-half (47.2%) of the oldest cohort (Early Baby Boomers ages 56-62) are simulated to be “at risk” of not having sufficient retirement resources to pay for “basic” retirement expenditures and uninsured health care costs—compared to 59% in 2003.
- The percentage “at risk” drops for the Late Boomers (ages 46-55) to almost 44%, compared to 55% in 2003.
- For Generation Xers, that “at risk” figure stands at 44.5%.
- When ranked by preretirement income, low-income workers are simulated to be “at risk” 70.3% of the time, while the middle-income group has an “at-risk” level of 41.6%. This figure drops to 23.3% for the highest-income group. These numbers are generally much more optimistic than those simulated for the same groups seven years earlier.
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Read the Release
Success Story
 An automatic 401(k) plan helped this horticultural company increase their plan participation to nearly 95%. By implementing a plan based on best practices, BallHort employees are now saving more for their retirement.
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