Has anyone had any experience with negative enrollments? I'm looking for feedback as to dropout rates and general participant feelings about the process. I have a plan that is thinking of using negative enrollments as a way to increase participation.

Brian, I have had a couple of experiences with negative 401k elections. All of them in the "fast food" industry. There was about a 50% drop-off rate among the "lowest-paid" employees. This was without regard to match and vesting. It can work better with an advance communications effort, company match, and reasonably rapid vesting.

We rolled out automatic enrollment for our wholesale/retail population in 1999, and have been pretty happy with the results.

Our experience has been pretty normal: opt-out rate has been consistently in the 5-7% range, but the percentage of people who actively override the defaults in the first year is also pretty small--probably less than 10%.

If we did it over again, we'd spend less time agonizing over whether the employees would be upset (they weren't) and more time studying the default deferral rate and the default investment elections.

RCK