Employers Adding Features to Boost Participation, Savings
According to data released by Schwab Retirement Plan Services, 73% of employers provided a 401(k) matching contribution in 2011, up from 68% in 2010. Eighty-three percent of employers made 401(k) advice available to plan participants, up from 80% in 2010 and compared with just 42% in 2005.
Forty-two percent of employers automatically enrolled employees into their 401(k) plan in 2011, an increase from 39% in 2010 and up dramatically from just 5% in 2005. This figure was even higher among larger companies.At companies with more than 2,500 employees in the plan, 58% used automatic enrollment.
Forty percent of employers using automatic enrollment also used automatic savings increases, up from 36% in 2010 and 14% in 2006.
“We are encouraged that more employers are recognizing the powerful impact these plan features can have on driving positive outcomes for their employees, particularly the impact of advice,” said Steve Anderson, senior vice president of Schwab Retirement Plan Services.
Recent Schwab data shows that employees who use independent professional advice services inside their 401(k) plan have tended to save twice as much, were better diversified and stuck to their long-term plan, even in the most volatile market environments. Advice data is based on plans serviced by Schwab Retirement Plan Services Inc. that offer independent advice to their participants through GuidedChoice Asset Management Inc. (GuidedChoice), which is not affiliated with or an agent of Charles Schwab & Co. Inc., Schwab Retirement Plan Services Inc. or any of their affiliates.