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Automatic 401(k) enrollment to become more common

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in Human Resources

Look for the U.S. Labor Department to issue proposed regulations by the end of 2005 that will encourage employers to automatically enroll employees in their 401(k) plans.

Currently, most employers require employees to "opt in" to their 401(k) plans, although 19 percent of large companies automatically enroll employees as soon as they're eligible, according to a Hewitt Associates study. Employees can, of course, decide to opt out of automatic plans.

The Labor Department says automatic enrollment encourages more employees to save for retirement. The proposal will provide lawsuit protection for employers who automatically enroll employees, as long as the investment choices offered by the employer are "reasonable."

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