“Opt-in” versus “opt-out”—it’s one reason countries like Austria have such high organ donor rates when compared with their European neighbors.
And of course, it’s a reason (the reason?) for high participation rates in retirement plans with automatic enrollment.
Plans that include automatic enrollment see rates “that exceed 90 percent—depending on plan features, industry, and employee demographics—compared with rates in the 50 percent range for plans in which workers must opt-in,” according to The Pew Charitable Trusts.
However, it not only increases enrollment but the amount of retirement savings, as well, which makes sense, since longer plan tenure would naturally correlate to better outcomes.
Of the respondents to a Pew survey who said they “definitely or probably would not sign up for an employer-sponsored plan on their own,” 55 percent said they would stay if automatically enrolled. Not surprisingly, a large majority (85 percent) of those who said they would sign up for a plan if offered also said they would stay in if automatically enrolled, according to the organization.
It added that “15 percent of those who said they would make the effort to sign up for a plan if offered also said they would choose not to participate if automatically enrolled. The seeming discrepancy may indicate some resistance specific to automatic enrollment, reflect confusion about the concept in general, or be an artifact of question-wording.”
Large majorities said they would not opt out if automatically enrolled, illustrating the power of automatic enrollment—regardless of the change they identified as most likely to motivate them to contribute to a plan.
“In fact, there was no statistically significant difference among those who said they would remain enrolled, no matter the motivator, implying that automatic enrollment is a cost-effective approach to increasing participation regardless of the pressures workers faced or inducements from which they thought they would benefit,” Pew concluded.