Using Automatic Enrollment in Local Government Retirement Plans to Increase Savings

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One way workers can increase their retirement security is to enroll in a supplemental savings plan. While such plans are common among local governments, there are surprisingly few incentives for employees to enroll in these plans. One way to increase enrollment is through automatic enrollment, but local governments have largely been slow to adopt this practice.

This issue brief examines the main factors preventing local governments from adopting automatic enrollment more quickly. In addition, it presents case studies of local governments that have overcome these barriers as well as ideas for how other local governments can do the same. Key findings include:

  • Legal constraints, administrative challenges, debate in the labor community about the merits of automatic enrollment, and perception that supplemental savings will overburden their employees were the four main barriers to implementation identified by the study.
  • Among local governments that successfully implemented automatic enrollment, working with employees and focusing on education were identified as key factors to success.
  • Having a single record keeper is also considered a good practice, but requires good planning to make a smooth transition.
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