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January 27, 2010, Featured Articles, Research

Employer Match Strikes a Hot Debate

By Kerry Pechter   Wed, Jan 27, 2010

Academic and industry researchers clashed over methodology, but they appear to agree that auto-enrollment in 401(k) plans might have unintended consequences on the employer matching contribution.

The topic of auto-enrollment in 401(k) plans and its potential impact on the employer matching contribution has sparked a scholarly rhubarb between the Urban Institute and the Employee Benefit Research Institute.

In December, researchers at the liberal Urban Institute reported evidence that the match at large firms with auto-enrollment is lower than at those without it. They warned that auto-enrollment, by lifting participation rates, could raise costs for employers and trigger cutbacks in the match or in other compensation.


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