Concept is fairly straightforward (saw it in Sunday NY Times a few weeks ago)...either a new or current participant can 'pre-program' future increases in his/her deferral rate. For example, a participant could enroll today at 5% and also select to increase the rate by 2% each January until maxed out by HCE/Plan/IRS limits.

Although this would take some coordination between a provider and a plan sponsor, the concept seems fairly attractive. When tied together with retirement calculators and even negative election/passive enrollment, it seems to have even more positives

I can't yet seem to identify any plans or providers that have taken advantage of such a program, and how the results have been. Can anyone help?

we are planning on implementing something like that late in 2004. we have a couple clients asking about it. i'd be interested in the feedback, too.

Providers who I've read or been told have this feature already in production:

• Fidelity
• CitiStreet
• JP Morgan
• Putnam
• Vanguard
• Hewitt
• T. Rowe Price
• Strong

It's safe to say that nearly all major recordkeepers either have this feature and plan to implement it during 2004.

We are a small 401(k) TPA firm using our own proprietary software system and we introduced this feature to our clients about a year ago. We have been big proponents of auto-enrollment for six or eight years now, and we borrowed that same philosophy for this program by recommending that our clients who want to use it automatically enroll everyone in the 401(k) Plan into it. Anyone who wants out can opt out. The clients who followed this recommendation have about 95% of their people in the program. Our one client who introduced it without auto-enrolling into it had about 3% of the employees join it. Inertia strikes again! Since the whole purpose of this program is to combat the inertia that causes people to not enroll or not contribute enough, not automatically enrolling people into it seems a little strange...you're letting inertia cripple the program designed to fight inertia!

Our program bumps up the contribution rate 1% each year on January 1. We don't let people set caps (e.g. "bump me up until I hit 15%"). Instead, they stay in the program until they hit the contribution level they want, then they opt out. Our enrollment forms have a place to check "Enroll" or "Un-enroll" in $uper$aver (our name for the program; the economists who introduced it called it SMarT [Save More Tomorrow]).

If anybody wants further details just let me know...