“If they opt out, why let it be a one-and-done thing?” said Nevin Adams, the chief of marketing and communications at the American Retirement Association. “Why not come back and give them another shot at auto-enrollment?”
A second chance is also helpful for employees who began working at a company before auto-enrollment was deployed on newcomers, Adams said. “In many cases, they knew they hadn’t signed up for the 401(k) plan and they were embarrassed to go ask for a form,” he said.
Each year, Plan Sponsor Council of America, a trade group for employers, studies the state of 401(k) plans. In 2018, it found that nearly 8 percent of the plans automatically re-enrolled employees who were not participating. In 2013, just 4 percent had done so.
In Pew’s 2017 survey of workers, the most common obstacle to saving for retirement that respondents cited was an unwillingness to sacrifice their current quality of life.
Yet most people don’t find a paycheck reduced by 3 percent or 5 percent all that disruptive — especially when they see their nest egg growing, said John Scott, the director of retirement savings at The Pew Charitable Trusts. “They eventually won’t opt out if you keep re-enrolling them,” Scott said.