Yep, yet another reason to pile even more scorn on the the flawed 401(k): A just-released GAO study that takes a look at the 401(k) auto-enrollment trend presents an interesting motivation for why employers are warming up to auto-enrollment:
“A representative of a large plan consulting firm noted that sponsors may do this [auto enrollment] with the long term in view; they want their employees to be able to retire at retirement age, partly to ensure that as productivity drops off, these workers do not have a reason to stay on indefinitely.”
Okay…that’s a fine idea to influence future generations of pre-retirees; get them to save and save earlier, and you have a better shot that they will want to exit gracefully. But we all know that’s not what’s expected to happen with the current crop of pre-retirees. In the latest no-surprise-here survey of employees, SunLife reports that two-thirds of us now expect to work longer to offset battered 401(k)s (and vaporized home equity.)
And that’s definitely bad news for anyone looking to shimmy up the corporate ladder any time soon. If the rungs ahead of you are still occupied by folks who now plan on staying put a bit longer, that could well delay your promotion — to say nothing of creating some inter-generational stress in the workplace. And it’s just more bad news for college grads trying to land a job.
