Workplace 401(k) plans that auto enroll participants at higher contribution levels lead to greater plan participation and lower opt-out rates, according to an analysis by New York Life Retirement Plan Services.

The analysis found that 30% of participants in plans with default deferral rates greater than 3% increased their contribution level within a year of being auto enrolled. This percentage has increased steadily since 2006, when only 13% of employees did so, according to the New York Life study. Employees enrolled in plans at lower rates had lower levels of engagement, with only 26% - 27% of employees increasing their contributions over the 2006 – 2012 time period.

Overall plan participation was also greater for auto-enrollment plans with higher contribution rates, the study found.  Plans that auto enroll employees at a rate greater than 3% of salary were found to have a 95% overall participation rate. Those with deferral rates less than 3% had 88% participation on average.

The analysis also found that employees enrolled in plans with higher default contribution rates tended to opt out of the plans less. It found that 14% of employees enrolled in plans with default contribution rates less than 4% opted out of the plans during the 12-month period ending March 31, 2012. Those enrolled in plans with contribution rates greater than 3%, in contrast, has a 10% opt-out rate.

In a statement, David Castellani, CEO of New York Life Retirement Plan Services, encouraged sponsors to “push the auto-enrollment envelope as far as they can.” “Success begets success,” he said in the statement. “If participants are saving and accumulating assets faster, they are going to realize the value of their plan faster.”

The analysis involved 480 plans and 800,000 participants across New York Life’s retirement platform.

New York Life Retirement Plan Services, a division of New York Life Investment Management LLC, administered more than $37 billion in bundled retirement plans as of March 31, 2012.