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TEMPE, Ariz. -- Given Americans' aversion to saving, some employers have begun unveiling 401(k)-style programs that automatically enroll eligible employees, excluding only workers who actively opt out, reports The Arizona Republic.
But while many financial experts see promise in automatic 401(k) enrollment services, not all employers are pursuing them.
A good example is the Arizona business unit of Circle K, based in Tempe, Ariz., which operates approximately 550 stores.
"We are thinking about heading in that direction," said Serena Moran, Circle K's director of payroll and benefits. "But some employees live paycheck to paycheck and just don't want to auto-enroll."
A big challenge for Circle K is merely raising awareness of its 401(k) plan. With 20,000 employees nationwide, including many young and part-time workers, it's hard to get the word out.
Circle K has started holding financial seminars run by RG Capital LLC, a Scottsdale, Ariz.-based wealth-management firm, and they've been well-received, Moran said. But Internet messages and mailings are still the main ways the firm communicates with most of its staff.
Circle K offers 401(k) matching funds of 50 cents on the dollar, up to between 4 and 6 percent of pay (depending on job level), but only 16 percent of workers participate. The company likely won't try auto enrollment until Congress better defines these programs and employer obligations.
"We're looking at auto enrollment, but we're not quite there yet," Moran said.
Four major bills addressing 401(k) auto enrollments have been introduced in Congress, with more coming. Some would ease various legal obligations for employers that pursue auto enrollment, said Jamey Delaplane, a partner at law firm Davis & Harman LLP.