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Retirement & Benefits

Auto-Enrolment

Also called: automatic enrollment, auto escalation, opt-out pension

Auto-enrolment puts employees into a retirement plan by default, leaving them to opt out rather than opt in. It is the most successful application of behavioural economics in public policy: participation rates jump from roughly half to over 90% with no change in incentives. Its known weakness is anchoring — people stay at the default contribution rate — which is why auto-escalation of that rate now usually accompanies it.

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