Automatic retirement enrollment raised black participation from 64 to 82 percent

Evidence

However, we’ve seen the impact, good and bad, that individual companies can make with policy changes, and that’s a good starting point. Instead of relying on HR to make individual phone calls, why not create an opt-in default for retirement accounts? The Ariel/Aon Hewitt study showed that when companies created automatic enrollment, black employee participation increased from 64 percent to 82 percent, with even more dramatic results for lower-wage workers. It also showed that as automatic enrollment with a default investment strategy like target-date funds increased, the percentage of black workers with stock investments in their retirement accounts also increased. After automatic enrollment, the funds would then be placed in appropriate investment vehicles that change over the life of the employee. If inertia wins, that employee still has a retirement account. — Dorothy A. Brown, The Whiteness of Wealth, 406

Categorization

• QUESTION: The Ariel/Aon Hewitt study numbers (64 to 82 percent) are useful specifics—worth confirming the study name for citation in the reader’s eventual piece.
• SHARE: Send to anyone in HR or retirement policy—opt-in defaults beat opt-out persuasion for closing participation gaps.