The use of auto enrollment has contributed significantly to higher participation rates and deferrals, according to the latest survey of defined contribution plan executives by Deloitte Consulting, the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists.
Fifty-seven percent of respondents said auto enrollment had led to an increase in average contribution rates, while 86% said auto enrollment had improved the plan participation rate, according to a report issued Thursday describing the annual online survey results. The report also said 62% of respondents attributed increased participant awareness to auto enrollment.
The report noted that a 3% average annual deferral rate is still the most common, applying to 48% of plans. Fourteen percent had an average deferral rate of 4%, and another 14% had an average deferral rate of 2% or less.
The other 25%of plans had an average deferral rate of 5% or more; that percentage has risen steadily from 15% in 2010 to 20% in 2011.
Among plans using auto escalation, 18% offered it in conjunction with auto enrollment while 31% offered it as a stand-alone feature. The most common auto escalation feature is a one-percentage-point annual increase, offered by 61% of plans employing auto escalation.