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.

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