Opting out of Retirement Plan Default Settings

This document is about research examining the prevalence and characteristics of employees who opt out of the default contribution rates and investment allocations in their employer-sponsored retirement savings plans. The study analyzes administrative data on over 100,000 newly hired employees enrolled in 206 different retirement plans featuring automatic enrollment. The findings show that the majority of participants (59%) elect contribution rates and/or investment portfolios that differ from their plans' default settings within the first few years of participation, with women and higher income participants more likely to choose different contribution rates and men and higher income participants more likely to choose different investments. The study also examines the importance of plan features in influencing participant behavior around default settings.