Skip to main content

Plan Sponsors of small & mid-sized Retirement Plans need to take note of the Top 4 Plan Design features for 401k plans.

Auto-Features are the future of 401k plan design. Utilizing Auto-Features can dramatically help your employees save for a successful retirement.


1. Auto-Enroll – This feature automatically enrolls participants in the 401k plan once they are eligible. Typically plans Auto-Enroll at 3% but in my opinion this should be at least 6%.

2. Auto-Escalation – Once enrolled in the plan the participants contribution is automatically increased on an annual basis. Typically plans automatically increase the contribution by 1% annually to a preset maximum. 10% is a popular ceiling for most plans.

3. Auto-QDIA – Most plans have a Qualified Default Investment Alternative (QDIA). The QDIA acts as the default fund for the plan if a participant doesn’t actively select their investment options. QDIA’s are typically an asset allocated investment option like a Target-Date Fund or Risk-Based Fund. I believe plans should automatically default their employees investment selection to the QDIA to assist them with making goods investment decisions.

4. Auto Re-enroll – All Auto-Features can be opted out of. To avoid letting employees fall through the cracks the plan should re-enroll their employees to the default contribution % elected for Auto-Enroll. This will also re-enroll them in the QDIA investment option and thus make sure every employee is given the opportunity to save successfully. Re-enrollment is typically done on an as-needed basis or in some cases annually.

If there is a specific topic you would like me to cover please reach out at I want this to be a community and would love to hear from you.

Check out our website