Nearly All Employees Eligible to Participate When 401(k) Is Present

And 87.6% of eligible employees have a balance in their plan.

Nearly 90% (89.4%) of U.S. employees are eligible to participant in their employer’s defined contribution (DC) plan, according to the Plan Sponsor Council of America’s 59th Survey of Profit Sharing and 401(k) Plans. Almost as many, 87.6%, have a balance in their plan, and 81.9% contributed to their plan in 2015.

The average deferral was 6.8% in 2015. Lower-paid participants contributed an average of 5.5%, while higher-paid participants contributed an average of 7.0%. Company matches to 401(k) plans averaged 3.8%, and the average contribution to 401(k)/profit sharing combination plans was 5.4%.

Just over two-thirds, 66.8%, of companies work with a financial adviser. Of those, 59.1% pay a fixed fee, and 35.1% pay a percentage of plan assets. The majority of plan expenses are paid by the company, with the exception of recordkeeping and investment consultant fees.

Plans offer an average of 19 funds. The funds most commonly offered are indexed domestic equity funds (79.3%), actively managed domestic equity funds (78.0%), actively managed domestic bond funds (74.7%), and actively managed international equity funds (73.4%).

Roughly one-third (34.6%) of sponsors offer investment advice, most frequently offered by a registered investment adviser (RIA) (28.8%), a certified financial planner (27.8%) or a third-party web-based provider (16.6%).

Over half (57.5%) of plans use automatic enrollment—most commonly at large plans (66.7%), but only among 25.5% of plans with fewer than 50 participants. Half of plans automatically enroll participants at a 3% deferral rate, up from 40.4% in 2014. The most common default option is a target-date fund (TDF).

The report is based on a survey of 614 defined contribution plan sponsors.