President Barack Obama has been talking about automatic enrollment for retirement plans for years as a "common-sense, practical solution" to increase savings.

To explain this promise, we should probably start with Obama's proposal for automatic enrollment in 401(k) plans.

Let's say you've just been hired at the widget factory, and on the first day, the human resources person tells you that if you want to, you can enroll in the company's 401(k) plan to save for retirement. Economists have concluded that about 20 percent of low-wage workers will sign up for the plan under this scenario.

But let's say the widget factory changes its policy. Now, the human resources person tells you that you're automatically enrolled in the program, but if you don't want to be in it, you can fill out paperwork and opt out. Under this scenario, the percentage of workers with 401(k) plans increases to about 80 percent.

One of the benefits of a 401(k) is that the contributions are not taxed. Another is that employers can put money into the accounts, and usually this is done on a matching basis. If an employee contributed 15 percent of his or her earnings for retirement, for example, the employer might match the first 3 percent. The national average for a 401(k) matches in 2007 was 3.2 percent, according to the Profit Sharing/401(k) Council of America.

Not all companies offer 401(k) plans, however. For those companies, Obama would require that they enroll their employees in Individual Retirement Accounts with an automatic payroll deduction. Generally speaking, IRA contributions are also tax-free, though there is no possibility of an employer match in an IRA.

Obama says the automatic enrollment will make it easier for workers to save, and he wants to make sure to include workers who aren't eligible for 401(k)s.

The proposal made it into Obama's 2010 budget outline, but it will need approval from Congress. So we rate this promise In the Works.