Employee retirement benefits are changing as cities and counties balance increasing program costs against limited resources; yet their purpose, to provide adequate retirement benefits for employees, has not.  With many local governments needing to scale back or even close their defined benefit plans, managers are looking for ways to increase employee participation in defined contribution (DC) plans.  One DC feature very popular in the private sector is auto-enrollment. Under auto-enrollment, employees are automatically enrolled in the employer’s retirement plan and stay in it unless they opt out of it.  Because of the ability to opt-out of the retirement plan, auto-enrollment differs from mandatory participation.

Though incredibly successful at increasing the participation rates in private-sector retirement plans, little is known about local governments’ adoption of auto-enrollment. ICMA’s research partner, the Center for State and Local Government Excellence, is studying the use of auto-enrollment by local governments to understand who is using it, why, and if not, why not. A report on auto-enrollment in DC local government plans is due out this summer.