How does the Auto Pilot program work?
Auto Enrollment – Employers are taking over the wheel and helping their employees put their retirement plans on “autopilot”. The simple approach is an “automatic 401(k)” sometimes called an auto pilot program. The previous waivers, eligible employees that are currently not participating, have the opportunity to be automatically enrolled in the 401(k) plan on an annual basis, while giving them the opportunity to opt out. Auto Escalation – In addition to auto enrollment, many plans opt for the automatic escalation feature where employee contributions can be set to automatically increase in a prescribed manner on an annual basis, with the ability to opt out. This helps employees overcome the tendency to remain at the default percentage, and will further increase their savings discipline for retirement.
