October 11, 2012
companies and participants are putting money into their plans, and at higher
rates than in previous years, Plan Sponsor Council of America(PSCA) found. ---
PSCA’s 55th Annual Survey of Profit Sharing and 401(k) Plans finds the
percentage of companies that made the matching contribution, when provided for
in the plan, increased to 96% (up from 91% in 2010). The survey’s results are
based on the 2011 plan-year experience of 840 plans representing 10.3 million
participants and $753 billion in assets. Small companies in particular are
bringing back the match, with 93% of companies with fewer than 200 participants
making the match in 2011, versus only 83% in 2010. The percentage of eligible
employees making contributions to the plan increased from 77% in 2010 to 80%.
addition, the average amount of the contributions showed improvement. The
average company contribution increased to 4.1% of pay (up from 3.7% in 2010),
and the average participant deferral rate ticked up, from 6.2% to 6.4% of pay.
percent of U.S. employees at respondent companies are eligible to participate
in their employer’s defined contribution plan. Most companies allow employees
to begin contributing to the plan immediately upon hire (60%). The average
percentage of eligible employees who have a balance in the plan is 86%. An
average of 80% of eligible employees made contributions to the plan in 2011, when
design features focused on increasing overall participant outcomes continued to
grow in popularity:
Funds: Availability increased from, 61.5% to 68.6% of plans. The average
allocation of plan assets is 12%.
401(k): Roth after-tax contributions are
now permitted in nearly half of plans (49%), up from 46% in 2010. Seventeen
percent of participants made Roth contributions when offered the opportunity. The
average Roth deferral (from ADP test results) was 4% by lower-paid participants
and 5% by higher-paid participants.
Enrollment: Automatic enrollment (AE) is used by 46% of plans (up from 42% in
2010). The percentage of AE plans with a default deferral rate greater than 3%
increased from 26% of plans in 2010 to 32%. The most common default investment
option is a target-date fund, present in 70% of plans.