Defined Contribution Retirement Plans: Automatic Enrollment (CRS Report for Congress)
| Release Date |
Sept. 5, 2024 |
| Report Number |
IF12756 |
| Report Type |
In Focus |
| Authors |
John J. Topoleski |
| Source Agency |
Congressional Research Service |
Summary:
Many employers offer their employees the opportunity to
save for retirement in defined contribution (DC) plans, of
which the most common is the 401(k) plan. Sponsors of DC
plans have two ways to enroll eligible employees.
Historically, most employees had to opt in to participate in
their plans. In opt-in plans, eligible employees make an
active choice to enroll in their employers’ DC plans by
signing up to participate, choosing how much of their salary
to contribute up to caps specified in statute, and selecting
their investments in the plans.
Over the past 15 years, an increasing number of employers
have been using automatic enrollment, in which they enroll
eligible employees in their DC plans without employees
making decisions with regard to participation,
contributions, or investments. Employees may, if they
choose, opt out of participating and change their
contribution amounts or their investments in the plans.
This In Focus analyzes data from publicly available pension
disclosures to determine the percentage of DC plans that
have automatic enrollment and the percentage of DC plan
participants that are in automatic enrollment plans.
