Schwab Survey Says Automatic Features, Advice Continue to Gain Ground

A new survey finds continued expansion of participant-friendly plan features.

 

According to data collected from 401(k) plans serviced by Schwab Retirement Plan Services, Inc. through the first half of 2010, nearly three-quarters (74%) of employers make 401(k) advice available to plan participants, as compared to 42% in 2005. 

Additionally, 28% of employers now automatically enroll workers in these programs, compared with just 5% in 2005 (before the passage of the Pension Protection Act of 2006).  Schwab notes that among companies with more than 2,500 participants, more than half (53%) use automatic enrollment.

More than a third (37%) of employers using automatic enrollment are also using automatic savings increases, more than twice as many as did in 2006 (14%), when Schwab’s plan clients first began implementing automatic savings increases.

More than three-quarters (76%) of employers currently include target date funds in their fund line-ups, compared to 57% in 2005. 

One area where things haven’t made such healthy strides; Schwab notes that 69% of employers provide a 401(k) matching contribution, down from a peak of 76% in 2006 – but up from 67% at the end of 2009.

 

 

Feature Adoption Rates (2005 through June 30, 2010)

Feature

2005

2006

2007

2008

2009

06/30/2010

Participant Advice

42%

56%

62%

66%

74%

74%

Target Date Funds

57%

62%

70%

73%

75%

76%

Automatic Enrollment

5%

14%

25%

34%

37%

38%

Automatic Enrollment and Automatic Savings Increase

N/A

14%

24%

30%

35%

37%

Employer Match

73%

76%

75%

72%

67%

69

 

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