Aon Hewitt 2013 Universe Benchmarks research report analyzes participant
behavior across the participation rates, savings levels, plan balances,
investments, account activity and demographics of more than 3.5 million
employees eligible for defined contribution plans. Four key trends emerged: participation
rates hit an all-time high, and saving rates increased slightly; automation
plays a strong role in many savings behaviors; leakage declined while
continuing to decrease from its peak in 2010; and diversification improved and
balances recovered to prerecession levels.
to Aon Hewitt, not only can plan sponsors use the report findings as a
benchmark to learn how their workers’ saving and investing behavior compares to
that of the average worker, they can be used to better understand general patterns
of participant behavior across demographic groups. That knowledge can then be leveraged to better determine who might
benefit from certain plan features or new opportunities to
improve results. In addition, demographic analysis helps plan sponsors pinpoint
which groups of workers may benefit from certain targeted communications.
According to the
report, at 78.0%, the average participation rate for plans hit an all-time high
and increased about two percentage points over last year. At 7.3%, the average
before-tax contribution rate increased slightly from the low of 7.2% in 2011. The
average Roth contribution rate was 6.0%—down from 6.4% in 2011. And, 72.5% of
participants saved at or above the company’s match threshold, up from 71.3% in
2011. Notably, the participation rate among employees subject to automatic enrollment
into their employers’ retirement plans is 81.4%, compared with 63.5% among
those not subject to automatic enrollment.