Should companies force their workers to contribute to 401k plans?

SSgt Alex Robinson — Sat, 17 Oct 2015 15:59:20 -0400

https://finance.yahoo.com/news/companies-workers-start-saving-more-000300465.html

Companies to Workers: Start Saving More—Or We’ll Do It for You

Firms are boosting the automatic retirement-savings rate—and finding little pushback from employees

Response by LCDR Private RallyPoint Member made Oct 17 at 2015 4:02 PM

LCDR Private RallyPoint Member — Sat, 17 Oct 2015 16:02:39 -0400

No. The process and benefits should be very clear including matching contributions, and having it set to a default unless you change it is fine, but forcing is wrong.

Response by Capt Private RallyPoint Member made Oct 17 at 2015 4:02 PM

Capt Private RallyPoint Member — Sat, 17 Oct 2015 16:02:54 -0400

I seldom meet a person who says I saved enough for retirement

Response by COL Vincent Stoneking made Oct 17 at 2015 4:38 PM

COL Vincent Stoneking — Sat, 17 Oct 2015 16:38:13 -0400

From the article, it sounds like they are doing what LCDR Private RallyPoint Member agrees with, which is setting the defaults higher UNLESS YOU OPT OUT. I think this is 100% and a good faith action on the parts of the employers.

I generally prefer opt-in systems, but the employer is damned if they do and damned if they don't. If they have an opt-out system, they are hated on for "taking" the employees money against their will (though all the employee has to do is be aware of the plan options and say "no."). If they have an opt-in system they are hated on because they "didn't help me save for retirement." Given the catch-22, I would go with the thing that is actually objectively better - funding retirement plans.

Response by LTC Stephen F. made Oct 17 at 2015 4:42 PM

LTC Stephen F. — Sat, 17 Oct 2015 16:42:51 -0400

No they should not SSgt Alex Robinson. If they are providing matching funds up to a certain percentage the companies should encourage their eligible employees to contribute.

Response by 1SG Private RallyPoint Member made Oct 17 at 2015 4:48 PM

1SG Private RallyPoint Member — Sat, 17 Oct 2015 16:48:35 -0400

I agree with COL Vincent Stoneking , it's better to error in favor of the employee by setting the savings to default on and highest level. They can always change their mind later and roll the money over to another retirement account. Too often, people feel like they missed the boat on a good thing because they didn't understand or someone didn't inform them. This will prevent it and come on, does it really hurt them to be forced to save some money? It's not like they don't have a choice, they just have to pay attention during the in-processing with HR.

Response by CSM Charles Hayden made Oct 17 at 2015 5:11 PM

CSM Charles Hayden — Sat, 17 Oct 2015 17:11:03 -0400

1SG Private RallyPoint Member When you say people miss out on a good thing because they don't understand- you are so right! I had to pay for such advice. Once I understood, I became a sharing proponent of the plan available at my place of employment.