401(k) sponsors want auto features

About 75% of advisers said they are working with plan sponsors in 401(k) plans that plan to add an automatic enrollment feature within the next two years, according to a new study. One of the biggest changes occurring in the retirement marketplace is an increase in automatic features such as automatic enrollment and automatic escalation, according to a study released by Boston-based Putnam Investments. Automatic escalation allows employees to automatically increase their annual plan contributions. “Our 401(k) advisers strongly agree that auto features will be one of the dominant drivers of increased retirement savings, but the hurdle of perceived added program costs means that many plan sponsors will not provide these features to their employees,” said David Tyrie, Managing Director and Director of Retirement Services, in a statement. Putnam Investments surveyed 525 advisers on line during a three week period in May and June 2007. Eighty-two of the advisers who were surveyed responded.