Pat Murphy, president of John Hancock Retirement Plan Services, calls it “auto-enrollment 2.0,” and “the next phase of auto.”

Automatic features are redefining retirement plan best practices, especially automatic deferral escalation pared with “stretching the match.” Murphy says these are two of several tactics he sees starting to catch on as plan sponsors notice the limits on bringing people into plans without a clear path forward.

Too often, “inertia wins the day,” even within plans that auto-enroll, says Joe Ready, director of institutional retirement and trust for Wells Fargo Retirement. This leads to lackluster retirement readiness even though more people are participating. Both Ready and Murphy cite the traditional 3% auto-enrollment entry point as being a major part of the problem. Many participants will camp out at this rate, believing, “If my company put me at 3%, they must know what they’re doing—that must be the good number,” Murphy explains.

Plan advisers can help their clients see the sense in trying more aggressive strategies, then guide in making adjustments to the plan design.

“The only way people will have a good retirement outcome is to save their way there,” Ready says. After a client adopts auto-enrollment, “the best thing [an adviser] can do is say, ‘Let’s focus on how we can improve the savings rate.’”

By most industry measures, a 3% salary deferral is expected to fall short of delivering retirement readiness, even when continued over a whole career. Ready urges moving participants to at least 10% as soon as possible, perhaps first auto-enrolling them at 6%, then auto-increasing their deferral 1% a year until 10% is reached.

Advisers could meet resistance, though, as sponsors may fear pushback from employees or heightened costs for the plan. Neither has to be the case, Ready says. The vast majority of participants want to be told what to save, he feels, while stretching the match offers a way to get around increased plan costs brought about by higher average deferral rates and employer contributions.

As to cost, “That’s where you get into the idea of a stretch match,” says Murphy. The sponsor can elect to match 50% of the first 12% of salary deferred, rather than the traditional dollar-for-dollar match up to 6%. “Here you keep the expense of running the 401(k) plan the same for the corporation but encourage participants to contribute at higher amounts to get that full match.”

NEXT: How to make it work

The adviser can discuss with the sponsor whether this model, or perhaps a different one, will work for its particular employee base. “Advisers should step back and look at the population,” Ready says. “Let’s really understand the savings behavior by age, gender, tenure and compensation, and let’s understand how the match formula is engaging or could engage people more broadly.”

The adviser could ask the recordkeeper for data showing the average saving rates broken down by each of these demographic factors, Ready says. He could then help devise strategies for picking up the slack among the most at-risk groups.

“[Say that you see] a bunch of people stuck at 4% savings rate on average. If the average savings rate is at 5% and you want to get them to 10%, maybe you can stretch that formula to a rate of 6 or 8%. … You can keep tweaking that formula,” he says.

At the same time, though, the match should not be stretched to the point where employee engagement snaps. “You do need to be careful,” Ready says. “You don’t want to stretch it so far that you have just a select group getting to the maximum of the stretch formula and you’ve demotivated other people.”

Carefully observing the data is critical in this, he adds. “Doing these various cuts of data, either by compensation and/or average saving rate, can really start to give you a lens into how to get maximum impact to the group that needs it the most.”

The demographics may also inspire a creative idea for a custom auto-escalation or match. For a company with a significant number of older employees, the adviser could suggest a plan design that automatically does catch-up contributions for those 50 and older. Most plans, he says, just notify the participant; this strategy would auto-enroll them and allow them to opt out.

While doing their self-study, some plans may discover that, for them, the enhancements are not worth pursuing. Murphy notes that John Hancock tells its clients what the features can do and how they may—or may not—be able to help. “We ask if they trying to attract and retain employees. Maybe they just want to replace 50% of someone’s income. Maybe they have a rich pension plan, so the 401(k) plan should be looked at in overall context of their retirement and benefits programs.”

NEXT: The best plan for a stretch match?

According to Murphy, the use of stretch matches is still fairly uncommon. He says they particularly meet the need of companies that want to help their participants save but, due to budgetary constraints, must limit their investment. No long-range predictions have been made as to how they may affect retirement readiness. He does note that early reports show plans with stretch matches, “do tend to have higher participation rates and deferral rates.”

When a plan sponsor does decide to auto-escalate and/or revise its match, of course that’s just the beginning. Informing participants about any change to a plan is critical, not to mention—for qualified plans—legally necessary. “When implementing these features, the sponsor needs to analyze how to make it as easy as possible on the participants,” Murphy says. “For example, make easy messaging a part of the implementation; use education and communications—why [the feature] is important and how to best utilize it; have face-to-face meetings, send emails, use mobile apps, have multiple different channels.”

The sponsor’s study of its work force can also help to target the approach and message, Ready says. Demographics may show that, for example, the company has a large group of Asian or Hispanic employees. The adviser and sponsor can discuss whether changes should be made to accommodate these workers’ different decisionmaking and saving style, he says.

If at any time, the plan sponsor still needs a nudge toward taking that next step, Murphy offers reassurance. He says he has seen the difference when participants catch on to the concept of growth. “We tend to get more engagement from participants at 6% rather than at 3%, especially once they start to see the money accumulating in their account,” he says. “It’s all theoretical until then.”