The Department of Labor is considering a proposal that would offer guidance for employers who automatically enroll employees in 401(k) plans, USA
Today reports.
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customized information for your industry, location, and job.
Get Your Report Now!A proposed rule on automatic 401(k) enrollment could come by the end of the
year, according to the newspaper.
The Department of Labor says automatic enrollment encourages workers to save
for retirement.
"We want to remove barriers for people to save for retirement, and automatic
enrollment really addresses one of the problems that people face: They may be
overwhelmed with the responsibility of saving for retirement," says Ann
Combs, assistant secretary at the Department of Labor's Employee Benefits Security
Administration.
Nineteen percent of large companies automatically enroll employees in their
401(k) plans, up from 14 percent in 2003, according to a recent survey by Hewitt
Associates.
Some employers avoid automatic enrollment because of the possibility that employees
may sue if investments lose money, the newspaper notes. The Department of Labor
tells the newspaper that the proposed rule would aim to offer some protection to employers
if the choice of investment options is "reasonable."
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