Auto enrollment and auto escalation
Boost plan participation and retention in one easy step by adding auto features to your retirement plan. Automatic enrollment (auto enrollment) makes it easier for eligible employees to participate in the plan, automatically enrolling them in the plan rather than relying on them to enroll. With automatic increase (auto increase or automatic escalation), participants can accelerate retirement readiness by bumping up savings rates automatically each year.
Source: Ascensus data 2023.
Take advantage of auto features in your plan
Help employees start and accelerate their retirement savings by adding auto features to your plan. Both automatic enrollment and automatic increase come with a variety of benefits for business owners and their employees.
Benefits of auto enrollment
- Satisfies SECURE 2.0 legislation requiring auto features for new plans beginning in 2024
- Potentially qualifies businesses to earn a tax credit of up to $500 for the first three years, for a total of up to $1,500
- Increases plan participation by up to 30%1
- Provides appropriate, designated plan investments if employees do not select their own fund lineup
- Helps with employee retention; eligible employees who do not enroll in their plan are three times more likely to leave their employer than those who do1
Benefits of auto increase
- Helps employees accelerate saving for the future while overcoming inertia, a major obstacle in employee saving
- Gradually increases employee contribution rates on a regular/annual basis
- Offers certain compliance testing advantages and may assist in passing certain nondiscrimination requirements
- Demonstrates your organization’s commitment to employee financial wellness, which can help attract and retain talent
Learn more about the benefits of automatic enrollment and increase in a retirement plan.
Why add auto enrollment and auto increase?
It's easy
Automatic enrollment and increase simplify the savings process, which encourages employee participation and steady savings habits. Participants can choose to opt out at any time.
It's simple
Employers can set a default contribution rate for employees, which gives them a starting point when enrolled. Employers can also set a default auto increase rate for employees, which increases annually until the maximum percentage is reached.
It's useful
Automatic enrollment and increase may reduce the risk of failing nondiscrimination testing; if participation of non-highly compensated employees or non-key employees increases, it may decrease testing failures.
Interested in learning more?
Already working with Ascensus? Contact your Client Service team. New to Ascensus? Contact your advisor.
1Ascensus data as of December 31, 2021. Plan average and individual employer results will vary.
Ascensus, LLC provides administrative and recordkeeping services. It is not a broker-dealer or investment advisor and does not provide tax, legal or accounting services. Neither the material contained herein nor in our website is intended to be, or construed as, an offer to sell or a solicitation to purchase any securities product. No person has been authorized to make recommendations or provide investment advice on behalf of Ascensus, LLC, with respect to any securities product, and nothing herein or as presented on our website is intended to serve as a recommendation or investment advice.
Based on your broker-dealer firm, institutional partner arrangement, and/or selling preferences, some program features may not apply.
