Large companies reported doubled participation rates in their 401(k) plans, in large part because of features such as automatic enrollment, according to a survey released today by Diversified Investment Advisors. Officials at companies with 1,000 to 4,999 employees reported a 90% or better participation rate in their companys 401(k) plan for the 2006 plan year.
According to the survey, 62% of the 200 corporate plan sponsors surveyed implemented or are implementing automatic enrollment, an increase from 55% in the 2005 plan year. Twice as many have or are implementing automatic deferral increases (30% vs. 15% in 2005). More plan sponsors also offer automatic rebalancing (31% in 2007 vs. 24%) and managed accounts (37% in 2007 vs. 32%).
Automatic plan features, particularly enrollment, have increased in popularity as a result of the Pension Protection Act, Laura White, vice president of marketing at Diversified, said in a news release. The report underscores how much legislation and regulation continue to drive changes to the retirement benefits landscape and strongly influence corporate plan sponsors decisions, she said.