Impact of Automatic Enrollment in the 457 Plan for South Dakota Public Employees


This study finds supplemental retirement plan participation rates are 85-percentage points higher for employees who are automatically enrolled compared to workers in agencies that did not adopt the automatic enrollment policy.

Robert L. Clark, Joshua M. Franzel, and Denis Pelletier
Publication date:
March 2018
Filed under:
Research Studies
Key findings:
South Dakota was one of the first states to provide for automatic enrollment of public employees in the state's supplemental retirement savings plan (starting in 2009). For those state or local governmental units choosing to participate, the default employee contribution amounts for their covered new hires were twenty-five dollars per month. Subsequent authorization of an automatic escalation arrangement for employee contributions has provided agencies the option of increasing that automatic employee contribution by ten dollars per month for each year of service, with a goal of helping those employees to build their retirement savings.Along with educational outreach and retirement calculator tools, these changes have contributed to a significant increase in the percentage of employees contributing to the SRP -- with auto-enrolling agencies experiencing participation rates 85-percentage points higher than for those agencies that did not adopt automatic enrollment.
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