WASHINGTON -- The Bush administration unveiled a proposal yesterday to make it easier for companies to enroll workers in pension plans such as 401(k)s, a move supporters hope will increase participation.
The Labor Department was required to take the action under a revamp of pension policies approved by Congress and signed into law by President Bush in August. ``Too many workers, some overwhelmed by investment choices or paperwork, are leaving retirement money on the table by not signing up for their employers' defined contribution plan," said Labor Secretary Elaine Chao.
The department said that one-third of eligible workers don't participate in 401(k) and other defined contribution plans, which give the employee the option of where to invest the account, usually among stocks, bonds, and money market accounts.
The proposal aims to make it easier for companies to automatically enroll workers. Workers are first given an opportunity to make their investment selections or tell the company they don't want to participate.
If a company doesn't hear back from the employee, the worker will be notified that he or she will be automatically signed up and invested in a mix of stocks and bonds geared to long-term savings.
Some 18 percent of employers now offer automatic enrollment for pension plans, department officials said.