American workers nearing retirement can sit back and relax. Fidelity Investments reports an emerging trend of automating retirement savings plans, such as 401(k) plans. The automation allows employees with a lack of time, money or investment knowledge to adopt lifecycle funds, while more 401(k) plan sponsors are using automatic annual increases and enrollment programs.

Many employees do not realize their retirement savings potential to the fullest, plan sponsors say. Automatic savings plans, which come in various forms, "take the guess work out of investing for retirement," noted Bill Carey, president of Fidelity Institutional Retirement Services Co., in a statement. For instance, demand for Fidelity's family of lifecycle funds, the Freedom Funds, which provide age-appropriate asset allocation, almost doubled between 2000 and 2003.

Another of Fidelity's automatic savings plans, the Annual Increase Program (AIP), automatically increases paycheck deferrals by a pre-determined percentage every year.

Discretionary investment management services, such as Fidelity's Retirement Plan Manager (RPM), are also becoming more popular. With RPM, for instance, employees can entrust the management of their retirement savings accounts to specific investment managers.

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