American Express Co., New York, has initiated automatic enrollment for new employees in its 401(k) plan — the American Express Retirement Savings Plan, according to an 11-K filed with the Securities and Exchange Commission.
The auto-enrollment feature took effect for people hired on or after Jan. 1, 2017, said the 11-K, which was filed June 28; the plan had $4.6 billion in assets as of Dec. 31.
As an effort to promote greater financial wellness, "we recently began providing automatic enrollment to our new employees," said Barbara Kontje, director of retirement Americas and smart saving, in an email. "These employees also have the option to make an alternative election or opt out."
Eligible new employees will be automatically enrolled at 3% of base pay, with automatic 1-percentage-point annual increases up to a total of 10% "unless the employee makes an alternative election to contribute at a different rate or opt out of automatic enrollment," the 11-K said.
The 401(k) plan also increased the company's match to 6% of total pay from 5%, "in addition to a discretionary profit-sharing contribution dependent on company performance," Ms. Kontje wrote. The company acted "to encourage current employees to increase their overall savings and improve their retirement readiness."
American Express makes a dollar-for-dollar match, Ms. Kontje wrote, adding "total pay means base pay plus overtime and most cash incentives."
Ms. Kontje added that "at least once per year, we reach out to employees who are not participating in the Retirement Savings Plan or are participating at a level less than the full match." About 20% of these employees have subsequently enrolled or increased their contribution rate, she wrote.