An alternative is to adopt automatic enrollment. Here’s how it works. When an employee first becomes eligible, she receives a form indicating that she will be enrolled in the plan (at a specified savings rate and asset allocation), unless she actively fills out a form asking to opt out. Automatic enrollment has proven to be an extremely effective way to increase enrollment in U.S. defined-contribution plans.6 In one plan studied in an early paper by Brigitte Madrian and Dennis Shea (2001), participation rates under the opt-in approach were barely 20 percent after three months of employment,
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