The percentage of companies that made the matching contribution, when provided for in the plan, increased to 95.5% (up from 91% in 2010), according to the survey, which reports about 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 92.8% of companies with fewer than 200 participants making the match in 2011, versus only 83.3% in 2010. The percentage of eligible employees making contributions to the plan increased from 76.9% in 2010 to 79.5%.
In 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 increased from 6.2% to 6.4% of pay.
Eighty-eight 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 (60.3%). The average percentage of eligible employees who have a balance in the plan is 85.9%. An average of 79.5% of eligible employees made contributions to the plan in 2011, when permitted.
Plan design features focused on increasing overall participant outcomes continued to grow in popularity:
- Target-Date Funds: Availability increased from 61.5% to 68.6% of plans. The average allocation of plan assets is 12.4%.
- Roth 401(k):Roth after-tax contributions are now permitted in nearly half of plans (49%), up from 45.5% in 2010. Seventeen percent of participants made Roth contributions when offered the opportunity.The average Roth deferral (from ADP test results) was 3.7% by lower-paid participants and 4.9% by higher-paid participants.
- Automatic Enrollment: Automatic enrollment is used by 45.9% of plans (up from 41.8% in 2010). The percentage of auto-enrollment plans with a default deferral rate greater than 3% increased from 25.8% of plans in 2010 to 32.2%. The most common default investment option is a target-date fund, present in 69.7% of plans.