Automatic enrollment in defined contribution retirement plans is increasingly becoming a popular way to help employees save for their non-working years, says New York Life Retirement Plan Services.

New York Life was a sponsor of an Employee Benefit Research Institute study that showed the vast majority of employees would not opt out of a plan if they are put into it automatically.

Only 11 percent of the 1,254 survey respondents to the 2013 Retirement Confidence Survey said they would opt out of a plan if automatically enrolled at a level of 3 percent of their salary. Sixteen percent said they would opt out if automatically enrolled at a 6 percent level.

New York Life found that in practice only 5 percent opted out when automatically enrolled in a plan last year at either the 3 percent or 6 percent level.

New York Life Retirement Services encourages its plan sponsors to use the automatic enrollment option. It also supports the use of an automatic sweep that once a year automatically re-enrolls those who have dropped out or picks up those who joined the company before automatic enrollment was in use.

Last year, 71 percent of those who had previously opted out of their 401(k) plan stayed enrolled after being automatically put back in the plan during the annual sweep, says David Castellani, CEO of New York Life Retirement Plan Services. Approximately 10 percent of New York Life’s retirement plan clients employed an auto-sweep feature in 2012.

EBRI’s survey found that 82 percent of workers contribute to an employer-sponsored retirement savings plan if it is offered. Overall, though, the percentage of workers saving for retirement continues to decline with 57 percent saving last year compared to 65 percent in 2009, according to EBRI.

The use of automatic enrollment has increased dramatically in recent years, Castellani says. Last year, 68 percent of the New York Life retirement plan companies used automatic enrollment compared to 50 percent in 2008 and 21 percent in 2006.

“Employers started looking at automatic enrollment with a lot of trepidation,” Castellani says. “Many started at low levels automatically enrolling employees at lower percentages of their salaries. Now the whole landscape has changed and we can show them that employees appreciate automatic enrollment.”

For employers, the advantage of using automatic enrollment is that it is part of a good benefits package that attracts talented employees, he adds.