Opposing Views On Automated Features
Q: Thanks for letting us speak with
you and get an opposing viewpoint.
A: No problem. I would just like to
state for the record that I am neither for
nor against auto-enrollment. I think
it depends on the situation and the
company demographics.
Q: Tell us the story. You’ve had
some bad experiences with autoenrollment. Can you tell us about it?
A: Sure, it was a startup plan that
happened to be with one of the payroll
providers. I think it came down to their
process [the payroll provider] not being
as good as it could have been. The
person who worked for the original
payroll provider who was supposed
to be receiving the enrollment forms
and a lot of these were supposed to be
negative-election enrollment forms
because of the demographics of the
employee base. We were sending the
forms to him, and that person left, his
boss left, and it all happened during the
enrollment period. We were stuck with
a lot of people that were automatically
enrolled in the plan who didn’t want
to be.
I guess in my experience, it really
depends on the demographics of the
employee group and what they look
like, if they’re going to participate. It
created that much more of a nightmare
over the course of the next six months as
people realized they were automatically
enrolled into the plan, and they wanted
their money out.
how to deal with any of that. I think
it’s just part of people growing up
and unfortunately they have to teach
themselves rather than get taught.
Q: Was there something special
about this demographic group and
the committee should have known
they wouldn’t be as interested in
retirement?
Q: So, what happened? Did
the plan sponsor turn off autoenrollment?
A: It was a lot of younger employees
with a high turnover.
Q: Do think engaging the younger
demographics to think about
retirement would have helped? Or
do you think that there’s no way to
have engaged them, even if autoenroll been in the employees’ best
interest?
A: It’s very tough to engage these guys.
A handful do get it – the ones who
ask questions when you go out to do
education and positively enroll during
the enrollment process. But everyone
else, because of the wage-scale they’re
on – I think for a lot of them, it’s one
of their first jobs out of college – they
don’t fully understand what they should
be doing.
Maybe part of that goes back to the
fact, when I went through college,
that there were zero courses taught on
money, planning, personal finance, or
A: No, they still have it. Some
of the younger employees have set
their contribution rate to 0%. Some
of them actually, during that 60
day window they had, pulled their
retirement contributions out. Since
then, we haven’t had a whole lot of
new employees that have been autoenrolled.
Q: How is the plan sponsor
addressing this for new employees?
A: Part of the hiring process now is
informin