Workers, Employers, Contributed to Retirement Plans at Record Rates

Retirement contribution rates reached record highs, with combined worker and employer contributions equal to 13.9% of pay in 2021, new data from the Plan Council of America show.


Workers and employers last year contributed to retirement saving contribution rates that hit records when compared to prior studies, according to data from the Plan Council of America show.

Combined retirement contribution rates hit 13.9% of pay in 2021, and employers raised their retirement contribution rate to 5.6% of pay—both all-time highs for the Annual Survey of Profit Sharing and 401(k) Plans

Among employers with a profit-sharing retirement plan, 13% increased profit sharing contributions, and 5% added to their employer match, while almost 90% of eligible workers contributed to a retirement plan, the research showed.

“As the nation emerged from the impact of the COVID-19 pandemic, benefit programs generally, and retirement savings programs particularly, were seen as a key employment differentiator,” said Hattie Greenan, director of research and communications at the council, in a press release.

Workers’ account balances averaged nearly $195,000 last year, up from $180,000 in 2020, the PSCA found.

Many employees decided to defer more to their account—at least in part prompted by their employer’s increase, Greenan added.

Employers were recovering from the myriad financial stressors of the pandemic, in 2021, according to the survey results. Many plan sponsors improved wages and benefits to aid their staff recruitment and retention efforts, the PSCA found.

In addition to contributions at record highs, 401(k) hardship withdrawals and plan loans were fewer in 2021 after a slight uptick of participants accessing their accounts during the pandemic, the survey found.

  • Plan participation grew to 89.2% in 2021, from 88.5% in , with participants deferring an average 8.3% of pay, up from 8.0% in 2020.
  • Plan distributions decreased as 1.9% of workers took a hardship withdrawal in 2021, down from 2.6% in 2020; and 18% borrowed against their account balance, down from 23.6% in 2020.

In addition to the trends noted above, plan sponsors in 2021 added features intended to boost both worker retention and savings rates, including Roth options and managed accounts, the PSCA found. The trend toward immediate vesting for matching contributions continued and has increased by 10 percentage points in the last three years, the data show. 

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  • Immediate vesting of employer contributions increased to 44.2% of plans in 2021, from 41.0% in 2020.
  • Roth options were offered by 87.8% of plans last year, and the percentage of participants making Roth contributions grew to 27.7%.
  • Managed accounts were offered by 48.8% of plans, up from 43.6% in 2020.

Employers responded to the economic dislocation wrought by COVID-19 with other enhanced retirement benefits and features, education and financial wellness tools, the survey found.

PSCA data show that plan sponsors may be rethinking the purpose of financial education programs. “The primary goal of participant education has historically been to increase participation rates, but that shifted to increasing financial literacy of employees in 2020, and that shift held for 2021,” wrote the authors.

The survey found 77.4% of employers named increased financial literacy as the main goal for their financial education programing.

The second most common goal, at 73.5%, to prompt appreciation for the plan, is likely used to retain employees, according to the survey.

Due to the increasingly fierce competition for talent, many employers used the quality of their retirement benefits and financial education to distinguish their company from others, the authors wrote.

Investment advice was provided by 44.2% of plans, up from 32.3% in 2020; and 27% of plans offer a comprehensive financial wellness program, up from 26% the prior year, the PSCA data showed.

“Organizations are not just providing robust contributions and plan designs, they are also moving to support employees with increased education and financial decision-making support through wellness program and advice,” Will Hansen, PSCA’s executive director, said in the release. “These supports, along with enhanced contributions and plan designs, will help buffer savers’ account balances against any future economic downturn.”

The PSCA Survey of Profit Sharing and 401(k) Plans includes data on the 2021 experience of 557 retirement plans. Survey respondents included four profit sharing plans, 294 401(k) plans and 259 combination profit sharing/401(k) plans, according to the survey details.

The full report is available for purchase at https://www.psca.org/research/401k/65thAR

Study: Women Say Competing Priorities Hinder Retirement Saving

Although women live longer than men, many retire earlier than planned and few can save enough to reach the income replacement levels as men in retirement.


Retirement planning has been complicated by volatile markets and high inflation, but it may be worse for women, new Goldman Sachs data shows.


Many women struggle to save adequately for retirement in the face of competing responsibilities, according to the Goldman Sachs Retirement Survey & Insights Report 2022, Navigating the Financial Vortex: Women & Retirement Security.

The survey finds women more are more likely than men to say that competing responsibilities negatively impact their retirement savings efforts.

Goldman Sachs data shows 50% of women say their retirement savings are behind schedule, compared to 35% of men, 14% of women are very confident in being able to reach their retirement saving goals versus 27% of men who said the same and 33% of women are concerned they will not be able to reach their retirement goals, compared to 19% of men.

Time spent out of the workforce to care for children or family members is one important factor contributing to the retirement savings challenge for many women, the research shows. Two four-year periods out of the workforce — one mid-career and one later — can lower retirement savings by up to 35%, the survey finds.

“Women more often than men are forced to work part-time, spend time out of the workforce to care for young children and elderly family members, and juggle other financial priorities during their careers,” Candice Tse, global head of strategic advisory solutions at Goldman Sachs Asset Management, said in a press release. “This can make their journey to retirement more difficult and incredibly personal.”

The gender pay gap contributes to women being less financially prepared for retirement, the report noted. Bureau of Labor Statistics data showed that although women comprise 47% of the workforce, they earn 21% lower lifetime income than men, 2016 Joint Economic Committee research on gender pay inequality found, according to figures cited in the Goldman report.

Goldman research also cited that women’s lifetime retirement contributions, on average, are 30% less than men, Government Accountability Office data showed.

“Women must also navigate the added complexity of longer life expectancy and therefore, need their savings to last longer, putting more pressure on their retirement finances,” the report stated.

Although 47% of women respondents to the survey said they felt on track or ahead of schedule for their retirement savings, 64% of men said the same, the research shows.

While women in the U.S. live, on average, three years longer than men — according to a January 2021 Social Security Administration factsheet – they can be expected to need more savings for a comfortable retirement, yet among retired women, 58% report they collect 50% or less of their pre-retirement income, including Social Security, compared to 44% of men, the survey finds. Goldman Sachs research also shows 20% of women reached 70% of their pre-retirement income, versus 30% of men who reached this amount.

The survey also finds 61% of women retired earlier than planned — compared to 50% of men — with 66% who said they retired for reasons outside of their control: 29% cited health reasons, 16% to take care of family and 15% that their job was no longer available.

Goldman survey data also shows few women retired because they had reached a retirement savings goal, as 15% of women left the workforce because their “savings were sufficient to fund my retirement” versus 25% of men.

Data for the report was gathered for Goldman Sachs by Qualtrics Experience Management, among 1,566 respondents between July and August. Participants included 967 working individuals across generations and 599 retired individuals ages 50-75, with responses reported by gender for both populations.

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