What is a common feature of both matching contribution formulas and automatic escalation?

The correct answer highlights that both matching contribution formulas and automatic escalation are designed to encourage employees to save for retirement. Matching contributions incentivize employees to contribute to their 401(k) plan by providing additional funds from the employer based on the employee's contributions. This not only serves to motivate employees to save more but also enhances their overall retirement fund.

Similarly, automatic escalation is a feature that gradually increases the amount employees contribute to their 401(k) plan over time, unless they choose to opt out. This method helps employees save more as they receive raises or increases in their salary, thereby supporting better retirement preparedness.

The focus of both features is on promoting higher participation and savings rates among employees, which is critical for achieving long-term retirement goals. Hence, they share the common objective of fostering a culture of saving for retirement.