Understand Organ Donation to Increase Plan Enrollment

Most 401(k) plans require employees to sign up to participate (“opt-in”) by going online or completing an enrollment form. The default “choice” under opt-in systems is non-participation.

Near-term human behavior, like procrastination and decision avoidance, means many eligible employees don’t participate. Thus they miss out on long-term savings advantages essential to their future financial well-being.

National organ donation systems provide a stunning example of what changing to an “opt-out” system can do.

Similar nations in other respects, Austria’s opt-out system results in 99% organ donation, Germany’s opt-in system greatly lags at 12%.

How is this relevant to your retirement plan? You can change to an opt-out system defaulting to auto enrollment, and even to auto deferral escalation. Research shows that opt-out plans over time result in significantly higher participation and account balances than opt-in plans.

If you are not getting ideas like this from your current plan advisor give us a call.