The British Show How to Improve 401(k)s
The imitators have outdone the originators.
A Big Step Forward
As with most developed nations, the United Kingdom has realized that without additional financial support, which the government itself did not wish to provide, many millions of its citizens would face precarious retirements. Consequently, in 2012, the United Kingdom mandated that all workers age 22 and over, earning at least 10,000 pounds annually, be automatically enrolled into the country’s equivalent of a 401(k) plan.
As with U.S. automatic-enrollment schemes, it ultimately is voluntary. Although all new employees who meet the program’s conditions are placed into the program, they may opt out within the first month of enrollment, without penalty. Every three years thereafter, they are re-enrolled, always with the opt-out provision. The government encourages, but it does not demand.