It can be a challenge to implement automatic features into an established defined contribution retirement plan, according to the Defined Contribution Institutional Investment Association, but features like auto enrollment and auto escalation have helped drive up defined contribution plan participation rates. That’s why the DCIIA developed a list of eight frequently asked questions to help plan sponsors decide if automatic features are right for their plan.

1. Are there any maximum limitations or requirements that plan sponsors should consider when implementing an automatic contribution escalation program? According to DCIIA, plan sponsors are free to choose the maximum auto-escalation percentage for their plan. Plan sponsors who want the protection of the Employee Retirement Income Security Act or the qualified default investment alternative safe harbors can elect any contribution escalation percentage with no maximum, and are not restricted by a 10 percent maximum contribution escalation percentage.

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