Automatic enrollment with auto-escalation is not only a smart way to help employees save more for retirement—it gets them started right away and steadily increases their savings over time without requiring any extra action. This approach helps employees build their retirement accounts little by little, making saving feel natural. It also strengthens the overall health of the company’s retirement plan.
Aligning auto-escalation increases with employee raises makes this strategy even more effective. When contributions increase at the same time as pay raises, employees still see a bump in their take-home pay, minimizing the impact of saving more. This seamless method encourages higher savings rates over time and shows employees that the company is invested in their long-term financial security.
Fred Barstein, CEO and founder of The Plan Sponsor University (TPSU), recently interviewed Dale, a participant who had just completed a TPSU fiduciary training program at Fordham Law School in New York. Dale, who works for a nonprofit school with 280 staff members, emphasized how his organization uses auto-enrollment and auto-escalation to boost retirement readiness. By timing contribution increases with employee raises, they’ve grown plan assets and helped employees commit to saving for their future. Dale reinforced the importance of “paying yourself first” and stressed that consistent contributions over time are the key to true financial security.
Read the Full Transcript Here:
Fred Barstein:
Greetings. This is Fred Barstein, CEO and founder of TPSU. Just completed a program, TPSU program at Fordham Law School right across the street from Lincoln Center. I am here today with Dale, who just completed the program. Welcome Dale.
Dale:
Thank you.
Fred Barstein:
Okay if we ask you a few questions?
Dale:
Sure.
Fred Barstein:
Very good. Before we do, just tell our audience a little bit about yourself, size of your organization, and your role there.
Dale:
Yes. My name is Dale. I work for non-profits only. I currently work for a school with 280 employees.
Fred Barstein:
One of the things you talked about is when you do, you have auto escalation, so congratulations on that with your automatic enrollment, so when you time that and why you did it and what the effect has been.
Dale:
The effect is, of course, the plan assets are growing and you have employees that are happier because they have invested in themselves. But the auto escalate, we do when they get their raises so they don’t feel that their take home check is reduced by the amount that they actually deferred.
Fred Barstein:
Right.
Dale:
Because we always believe that you need to pay yourself first, and that’s the best way, the real way to pay yourself first. At some point, your old self will thank your young self, because when you get old you’re not working and it’s really the time to actually invest in yourself. It’s really not about how much you put in, it’s actually how long you put it in. That will really give you the most reward.
Fred Barstein:
Well, congratulations for doing that. Final question. Would you recommend this? A couple of things you learned today that you want to tell our audience?
Dale:
Oh, the amount of expert in the panel and the access to these people after every session is priceless. The fact that I was invited and the amount of organization and how things are on point and well planned one day workshop is very, very meaningful. Being away from work for a day, not to mention it does provide all the professional credits whether you’re at SHRM, you need professional credits as a CPA. This is a way really to enrich yourself and to be able to actually help your employees and your employer eventually.
Fred Barstein:
Well, thanks for coming, thanks for your time today, and thank you for watching 401k TV. Please stay tuned.
Dale:
Thank you.
