ATLANTA (AP) — More employers need to automatically enroll their workers in 401(k) savings plans in order to avoid a coming retirement crisis, AARP officials said Monday.
The group, with 39 million members nationwide, is launching a national campaign in which officers and volunteers will meet with business leaders, civic groups and individual companies to spread the message.
In 2005, only 17 percent of 401(k) plans offered automatic enrollment, according to a study prepared for the AARP of 794 large U.S. employers.
With people living longer, health care costs increasing and fewer companies offering traditional pension plans, savings systems like the 401(k) will be crucial in making sure retirees have enough money to live, the AARP says.
''Georgia's employees are facing a crisis that will be 20 years in the making,'' said Ken Mitchell, Georgia state director for the AARP.
Georgia is one of 12 states where AARP is launching the 401(k) push this week. They'll start similar promotions in the rest of the country in two weeks.
According to the study by personnel consulting firm Towers Perrin, 30 percent of surveyed workers who were eligible for 401(k) plans didn't participate. Among those who did, many had either stopped contributing or didn't contribute enough to receive matching contributions from their employers.
Experts say procrastination, fear and lack of financial knowledge are the key factors keeping workers from opting into the plans.
''We're still people whose parents and grandparents had traditional pensions,'' said Jean Chatzky, financial expert and author who works as a contributing editor at Money magazine and financial editor for NBC's ''Today'' show. ''We've got a generation of people that we really have to get up to speed.''
Studies show workers are far more likely to enroll when they first start a job than when they've already gotten used to bringing home a certain amount of money in each paycheck, Mitchell said.
''If they are asked immediately to sign up, like they used to be for their pensions or they are for their health care, they'll go ahead and do it and they'll feel good about it,'' he said.
Chatzky is joining AARP on the 401(k) awareness campaign. They're hoping to convince employers, particularly small businesses that offer savings plans less frequently than their larger peers, that beefing up their plans is a way to recruit and keep better employees.
Among 26 possible choices, respondents ranked retirement benefits 6th on a list of factors they consider important when choosing a job, according to the study.
Other states where AARP is rolling out the campaign this week are Alabama, Florida, Hawaii, Illinois, Maryland, New York, Oregon, Pennsylvania, South Dakota, Tennessee and Utah.
