Another case of "lead a horse to water".... I think if you utilize your record keeper to place newly eligible participants in age appropriate funds and then provide verifiable documentation of efforts to satisfy 401c, I would suspect that you would be relatively "safe". I believe that there have been case studies that have verified that this approach is better than that of a MM fund as the default.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I've also found that most of the news regarding automatic enrollment has been positive, but keeping in mind that you are asking if there has been any "negative" news out there , here's one item I found on BLR's Compensation site at http://compensation.blr.com/display.cfm/id/155357
Basically, it's about a study that concludes that "automatic enrollment boosts participation rates in 401(k) plans significantly, but the quality of participation among automatically enrolled employee is lower than that of employees who contributed through traditional enrollment." It's from November 2006. Employees under automatic enrollment contributed less than those who were traditionally enrolled.