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Does Automatic Enrollment Increase Contributions to Supplement Retirement Programs by K-12 and University Employees?

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  • Robert L. Clark
  • Denis Pelletier

Abstract

This study examines the impact of the adoption of automatic enrollment provisions by schools and universities in the state of South Dakota for its supplemental retirement saving plan (SRP). In South Dakota, educational personnel are also covered by a defined benefit pension plan and by Social Security. Thus, career public employees in South Dakota can expect a life time annuity from these two programs of around 75 percent of their final salary. Prior to the introduction of automatic enrollment, the proportion of newly hired educators who were contributing to the SRP was less than two percent in their first year of employment. After the introduction of automatic enrollment, over 90 percent of newly hired workers who were auto enrolled were participating in the plan. Thus, auto enrollment is shown to have the same powerful impact on contributions to a retirement saving plan for educational employees even when they also can expect life annuities from a defined benefit pension plan.

Suggested Citation

  • Robert L. Clark & Denis Pelletier, 2019. "Does Automatic Enrollment Increase Contributions to Supplement Retirement Programs by K-12 and University Employees?," NBER Working Papers 26263, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26263
    Note: AG
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    References listed on IDEAS

    as
    1. Robert L. Clark & Aditi Pathak & Denis Pelletier, 2018. "Supplemental Retirement Savings Plans in the Public Sector: Participation and Contribution Decisions by School Personnel," Journal of Labor Research, Springer, vol. 39(4), pages 383-404, December.
    2. Robert L. Clark & Denis Pelletier, 2019. "Impact of Defaults in Retirement Saving Plans: Public Employee Plans," NBER Working Papers 26234, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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