Study: High automatic 401(k) deferral rates may hurt participation

01/2/2013 | BenefitsPro.com

Employers who set high default deferral rates in an attempt to compel worker participation in 401(k) plans may find the results disappointing, according to a study by the Center for Retirement Research at Boston College. While plans with automatic enrollment and escalation have been successful, high deferral rates could lead participants to promptly decrease their deferrals, the study found. Group demographics play a role, particularly in the case of low-income workers who were "nudged" to invest their income-tax returns rather than spend them, researchers said of an experimental project involving a savings-bonds program.

View Full Article in:

BenefitsPro.com

Published in Briefs: