Paychex Offers Auto Enrollment Option for 401k Plans
ROCHESTER, NY, June 9, 2008 -- Paychex, Inc. has announced the addition of auto enrollment as an optional plan feature of its 401k offerings, which will allow employers to automatically enroll their employees in the company 401k and increase overall plan participation.
Since the enactment of the Pension Protection act of 2006, overall adoption of automatic enrollment has increased among large employers – up 19 percent since 2005 to 34 percent in 2007 – according to industry experts. With the Paychex auto enrollment feature, small- to medium-sized businesses can also adopt and benefit from this feature.
With auto enrollment, employers have the option to automatically enroll all eligible employees, or only those who become newly eligible for the plan once it is put into effect. Employers who auto enroll workers in a 401k plan typically experience higher participation rates than those using traditional enrollment methods. Higher participation helps ensure the viability of a small- to medium-sized business' retirement savings plan and increases employees' retirement savings options.
"The introduction of auto enrollment enables our clients to offer employees the same benefits that are typically associated with larger employers," said Tony Tortorella, Paychex Human Resource Services vice president of sales. "Now, with auto enrollment, employees have more potential for deferring money into the plan, ultimately leaving them better prepared for retirement. It's a win-win situation for everyone involved."
Once auto enrollment is implemented, eligible employees are enrolled in their company's 401k plan 30 days after their eligibility date, allowing them to opt out before payroll deductions are made. Employees then benefit from an additional 90-day period to opt out of the plan and request distribution of any deductions that occurred without facing penalty fees. All auto-enrolled employees receive a confirmation letter with detailed instructions on how to opt out of the plan.
Paychex manages the complete enrollment process – from notifying the plan sponsor when newly hired employees become eligible to participate, to auto enrolling employees – allowing business owners to remain focused on running their business.
The Paychex 401k plans are part of the company's suite of retirement services and are designed to meet the needs of small- to medium-sized businesses.
About Paychex
Paychex, Inc. (NASDAQ:PAYX) is a leading national provider of payroll, human resource, and benefits outsourcing solutions for small- to medium-sized businesses. The company offers comprehensive payroll services, including payroll processing, payroll tax administration, and employee pay services, including direct deposit, check signing, and Readychex®. Human resource and benefits outsourcing services include 401k plan recordkeeping, health insurance, workers' compensation administration, section 125 plans, a professional employer organization, time and attendance solutions, and other administrative services for business. Paychex was founded in 1971. With headquarters in Rochester, New York, the company has more than 100 offices and serves approximately 561,000 payroll clients nationwide. For more information about Paychex and our products, visit www.paychex.com.
###
Click here for more material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues on 401k plans.
This is a press release provided by the company or its representatives. 401khelpcenter.com, LLC is not the author of this release and is not associated or affiliated with any firm or organization mentioned unless otherwise noted. Use of any information obtained from this release is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com, LLC.
