Participants’ 401(k) balances will increase by 28% for lowest-income participants and 12% for highest-income participants by 2030 as a result of automatic enrollment and automatic increases in employee contributions, according to a report by the Employee Benefit Research Institute.
The Pension Protection Act of 2006 allows 401(k) plan executives to automatically enroll employees in the company’s 401(k) plan and automatically increase contributions to coincide with a raise or a work anniversary.
The report was based on data from EBRI’s 2007 Retirement Confidence Survey.
