10/15/2008 - As traditional pensions fade from the retirement landscape and workers are forced to take a lot more responsibility for their own financial futures, employers are rolling out a variety of features to help workers prepare for retirement.
The key, according to retirement experts: Get workers started automatically and set them on a course of escalating retirement contributions through their working lives.
Auto-enrollment in company 401(k) plans has gained steam since the government passed the 2006 Pension Protection Act, which gave employers and plan sponsors incentives to adopt such plans. According to consulting firm Watson Wyatt, the number of companies offering automatic 401(k) plans has grown to 39 percent this year from 28 percent in 2006. Companies also have stepped up retirement education seminars.
Mark Iwry, principal at the Retirement Security Project and nonresident senior fellow at the Brookings Institution, thinks automated features are more helpful in preparing workers for retirement than employer seminars. "Intelligent use of defaults is more powerful than the education," Iwry said. Such features, he added, can get "people across the goal line rather than just pointing them to where the goal line is."
View Getting Workers on Track to Invest Early and Often on the Washington Post's site.
Pew is no longer active in this line of work, but for more information visit the Retirement Security Project on PewHealth.org.