For example, employers might set default contribution rates to rise as workers receive pay raises, or set the default investment option to a diversified portfolio that adjusts as the worker ages.8 In addition, employees have increasingly expressed interest in employerprovided financial education, and firms are responding.
In this regard, the Congress passed legislation in December 2001 that removes obstacles for employers to hire a third-party to provide financial advice. Previously, firms had been reluctant to provide investment advice for fear of being held liable should such advice lead to losses, even if an adviser was considered to be competent.