Participation Rates
During 2010 overall participation rates declined slightly from 73.7% to 73.2%. The value of auto-enrollment was evident as plans using this feature had 34% higher participation rates than plans not using auto-enrollment.
Plans using auto-enrollment (AE) had a participation rate of 86% while those without auto-enrollment had just 64% participation. Despite the continued effectiveness of auto-enrollment, the economic environment still affects an employee’s decision to save. In fact, participation rates fell slightly in 2010 as economic concerns may have caused some workers to stop their plan contributions.
Looking Forward
With the increasing emphasis on retirement preparedness, we expect many workers who stopped contributing to resume plan contributions once the economy improves. Employers who see a drop in participation rates may consider increasing their educational outreach to encourage participants to reengage.
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Key Findings
- Participation rates for auto-enrollment and non-autoenrollment plans declined slightly
- As expected, participation in auto-enrollment plans far exceeded non-auto-enrollment plans
