Automatic 401k Enrollment
Automatic 401k enrollment is a feature offered by some employers that automatically enrolls employees in their 401k retirement savings plan. With this feature, new employees are enrolled in the plan by default, and they must take action to opt out of the plan if they choose not to participate.
The idea behind automatic enrollment is to encourage more employees to save for retirement by making it easier and more convenient for them to participate. Many employees fail to enroll in their employer's retirement plan simply because they never get around to it or find the process confusing.
Automatic enrollment aims to overcome these obstacles by making enrollment automatic and straightforward, often using default investment options and contribution rates. It is important to note that employees can still adjust their contribution rates or investment options once enrolled in the plan.