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The advantages of automatic enrollment
- More employees end up contributing with auto-enrollment versus an opt-in 401(k) plan.
- Studies show that auto-enrolled employees save more over time.
- Employers help their employees start preparing for retirement as soon as they are eligible.
- Increases plan participation, which can have a favourable impact on compliance testing.
- 401(k) plans with auto-enrolment offer significant tax advantages for employers, including deductions for employer contributions.