The design of many 401(k) plans is about as cutting edge as flip phones, Walkmans and dial-up Internet access. While some employers -- especially the biggest ones -- have upgraded from 1990s-era plan designs, few are embracing state-of-the-art features that encourage workers to save more for retirement.
And, unlike tech-savvy consumers lining up for the newest smartphone, most retirement plan sponsors don't appear interested in an upgrade. After surveying 1,500 plan sponsors, Cogent Research’s Linda York accused employers of widespread "complacency."
Two of the best ways to encourage savings, retirement experts say, are to automatically enroll employees in 401(k) plans when they're hired, and to automatically increase how much they save each year. While employees can opt out of the plan or stop the increases, automating the process vastly boosts the number of employees who use the plan and how much they sock away.