Tag: 401(k) plans
Abstract Many employers match employee contributions to 401(k) plans. However, the employer cost of continuing this practice may increase rapidly as trends towards automatic enrollment boost employee participation. This paper examines the relationship between employer matching behavior and automatic enrollment. Using a sample of large 401(k) plans, we find that match rates are about 7…
The brief’s key findings are: 401(k) fees are complex and may not closely correspond to costs. Fees also raise design issues, such as transfers from high-balance to lowbalance participants and from participants to non-plan investors. Better disclosure could help employers and participants avoid unreasonable costs. Policymakers may also want to opine on the transfers embedded…