In this interview from the Fi360 Conference, John Sullivan speaks with Ashley Rosser, a fiduciary consultant at Victory Fiduciary Consulting, about the effectiveness and considerations surrounding auto enrollment and auto escalation in retirement plans.
Ashley shares that their firm began implementing these “auto” features around three years ago with notable success, reporting a 95% acceptance rate among employees. These automatic processes simplify participation in retirement plans by automatically enrolling employees and increasing their contributions over time—without requiring active decision-making.
However, Rosser emphasizes that while these tools are beneficial, they must be tailored to the specific demographics and industry of the employer. For example, manufacturing or factory environments with high employee turnover and short eligibility periods may face logistical challenges. Constant turnover can lead to a high volume of participants with low balances remaining in the plan, which becomes an administrative burden.
The conversation also highlights the importance of timing education sessions around automatic increases. Rosser recommends that advisors hold sessions 30 days before an automatic escalation to explain its benefits and encourage participants to go beyond the default increase if possible. She explains that small increases, like 1%, often go unnoticed by participants financially but have significant long-term benefits for retirement outcomes.
The ultimate goal of her firm is to remove barriers to participation, helping more people save effectively for retirement with minimal friction.