According to a press release, the data reveals a 67% overall participation rate and a 7.63% overall participant savings rate. However, participation rates range from a low of 54% in the retail industry to 77% in the technology industry.
The participation rate for the Accounting/Consulting/Business Services industry is 69% and the Banking & Financial Industry has a 71% participation rate. Health Care industry 401(k) sponsors see a 59% participation rate, the press release said.
Meanwhile, participants in the technology industry also save more on average (8.25%) than other industries, while participants of plans in the Wholesale industry save the lowest (6.57%). Participants’ savings levels are 8.18% in Accounting/Consulting/Business Services, 7.6% in Banking & Financial, and 6.83% in Health Care.
According to Schwab, while there are several contributing factors to explain why industries have different results in their plans, including an employer’s approach to automatic enrollment, savings increase programs and matching contribution levels, participation and savings levels are also significantly affected by a person’s salary, age and length of time with the company.
Schwab data shows that an average of 48% of employees earning less than $30,000 per year participate in their 401(k) plans, compared with 77% of those making between $50,000 and $74,999. Participation rates increase with income, up to 89% for participants earning $250,000 or more.
However, savings levels plateau among participants earning $75,000 to $99,999 at 8.72% and drop off for those with higher earnings. The average savings level for those earning more than $250,000 is 6.76%, while the average rate of savings for those earning less than $30,000 is 7.57%.
Schwab’s benchmarking data, which includes both participating plan sponsor and TPA clients, represents two million plan participants and 2,400 plans.