It may sound paternalistic but employers have the responsibility to protect their employees future self from their current self. Most employees look up to their employers and value their opinions and help.

For most workers, if there is no workplace retirement saving, there will be no retirement income other than Social Security. Realizing this, some companies with significant non-participation, especially those under age 30, implemented AE for their new hires. A few have gone so far as to automatically enroll even current non-participating employees. The results have been gratifying. Less than 5 percent of those automatically enrolled are opting out. This is real progress.It is true that some automatically enrolled participants are contributing at a lower rate than they would have had they voluntarily elected to participate in their 401(k) plan. Employers know this and are taking action. First, even after the implementation of AE, they continue their efforts to persuade their 401(k) participants to save more. Companies with AE don’t just want 401(k) participation; they want employees to save adequately.

Like it or not employees are looking to employers for leadership and guidance. This includes preparing for their retirement.

Please comment or call to discuss how this affects you and your company.