The retirement planning industry has evolved significantly since the birth of the 401(k) plan. With the Pension Protection Act of 2006, doors opened for innovations in plan design including automatic plan features. In recent years, employers have increasingly adopted automatic features—including automatic enrollment, escalation and default investments—as a way to enhance retirement outcomes for plan participants.

And, plans that have been using automatic enrollment for eight years or longer see dramatic lifts in participation—90 percent compared with the industry average of 75 percent. Among plans that use automatic escalation, deferral rates are more than twice the industry norm at 8 percent versus 4 percent.

Put simply: Automation works. Yet despite these impressive results, less than half of all plan sponsors have adopted auto escalation and enrollment to date, according to the Plan Sponsor Council of America.

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