DOL chimes in on automatic 401(k) enrollments
A quick followup today to an earlier post about automatic enrollments in 401(k) plans. That post examined a report that claims retirement savings will jump thanks to a provision in the Pension Protection Act that allows employers to automatically enroll workers in company 401(k) plans.
Now comes word that the Labor Department has finalized rules that specify what investments employers can make on their workers' behalf.
"Under the rules," writes CFO.com's Stephen Taub, "participants and beneficiaries must have been given an opportunity to provide investment direction, but have not done so. The final regulation does not identify specific acceptable investment products. Rather, it describes mechanisms for investing participant contributions. 'The intent is to ensure that an investment ... is appropriate as a single investment capable of meeting a worker’s long-term retirement savings needs,' the (Labor)Department said."
Does your organization automatically enroll employees in a 401(k) plan?