Schwab Reports Big Increase in 401(k) Sponsors Selecting Auto Enroll

Charles Schwab says the number of its 401(k) plan clients automatically enrolling employees has risen dramatically to 20%, up from only 5% in 2006. Of those that do, 25% automatically place investors in target-date funds, and 95% give investors the chance to set up annual savings increases.

“The number of our clients choosing to offer different automatic plan features continues to grow very rapidly,” said Clare Bergquist, director of 401(k) strategies at Charles Schwab. “Automatic enrollment used to be considered innovative and almost ‘Big Brotherish,’ but today, it is viewed as more conservative and almost protective.”