Automatic Enrollment and Participation in South Dakota’s Supplemental Retirement Saving Plan
Automatic enrollment has proven to be a powerful means of encouraging retirement plan participation in the private sector.
Numerous studies suggest that automatic enrollment increases participation in retirement saving plans. But virtually all of this research pertains to private sector firms offering only a 401(k) plan. In contrast, no major study to date has looked at how automatic enrollment affects participation in supplemental retirement plans offered by state governments, which tend to provide richer retirement benefits than those typically offered in the private sector. This paper adds to the literature by examining the effects of automatic enrollment on the state of South Dakota’s supplemental retirement saving plan (SRP), which is a 457(b) plan.
This study was presented at the June 25, 2020, TIAA Institute Fellows Symposium. To view additional research that was presented, go to the 2020 Fellows Symposium Overview.
The authors were granted access to administrative records of all South Dakota public employees hired between 2005 and 2016. Using these data, they determined and compared SRP enrollment rates for workers hired before and after automatic enrollment was introduced in 2010.