I'm not sure about the automatic enrollment. If people are barely scrapping by living paycheck to paycheck, up to their eyeballs in credit card debt, and cashed out of their home equity then subtracting even 3% of their income can cause some serious problems. Oddly enough, only 20% of the people where I work now enroll in the 401k plan despite a 50% match! Many are simply too skeptical of the stock market, mutual funds, or are too confused about where to invest or can't afford to lose $100 of their pay.

Strange that 2011 was selected as the cut off year for adjustments. 2011 happens to be the year the first batch (4 million) retirees hits the social security dole.

A little bit of forced savings is probably a good thing. Some people just look at the balance in their bank account when deciding if they can buy something. If that number is lower because some of it has been taken from their paycheck and put directly into savings - for their own benefit - most people will probably be able to pinch somewhere and adjust, and will be better off for it when they retire.

If the money is saved

I agree with Charlie that a little forced savings is a good thing. However, most automatic enrollments only place investments in money market accounts (I assume this is to protect the plan administrator from liability if an equity investment decreases in value). So, the employee is being deprived of potentially far greater investment gains. Over the past 50 years cash has been the absolute worst investment class.

My understanding was that this act would mandate the default investments not be a money market. I haven't followed it terribly closely however I do believe this to be true. That was part of the problem that employers had with it, because if the default investment had bad returns, they didn't want to be sued by employees for the losses. The defaults are supposed to be set to lifecycle/lifestyle type funds, IIRC.

Khyron - Thanks for letting me know about that. I'm glad to hear that it is in the act to not default to money markets.

The rule of lawyers in this country is disgusting.

Merely a scam to prop up the stock market. If Congress really wants to do something, how about abolishing SS and reduce income taxes and stop spending too much on un-Constitutional programs.

This would make the average citizen much wealthier. It disgust me that my SS stolen from me could easily fund a decent yearly 401k and I only make around the median income in this country.

But hey, gotta keep the sheeple down, and they like it!