If you just let your employer put your retirement savings in their default mutual fund, what you're going to get is some product sold to the company by a money manager who is taking 2-3% of your money off the top.

Given how rare it is for a mutual fund to consistently return even 4% for any amount of time (seriously, if you know of one that does let me know and I'll sign up at once - 1-2% is more typical), you end up with something that's worth less than a basic savings account, but with a bunch of rules attached to it that prevent you from using your money when you want. Depending on the circumstances, that could be a pretty poor deal.

Forgive me if this is ignorant, but does that basically mean the "employer match" (common at orgs I've worked for) is basically doing nothing as it's a similar percentage?

Employers only match what you put in, whereas mutual funds take fees off of the returns. That suggests to me to contribute only enough to get your match, and roll it into an individual account after you leave the company for more control over where it goes.

Agreed. Not as set-it-and-forget-it as it's advertised to be, but never turn down free money. Just do the math so you know what you're getting.