Savings rate suggestions, greater adoption of automatic enrollment and financial wellness programs are among efforts plan sponsors are making to improve employee retirement savings outcomes, finds the 57th Annual Survey of Profit Sharing and 401(k) Plans from the Plan Sponsor Council of America (PSCA).
Nearly 22% of companies surveyed said they provide a suggested savings rate to employees—18.8% suggest 6% and 46.5% suggest a rate higher than 6%. Half of all plans have an automatic enrollment feature, up from 47.2% in 2012, and 44% of all plans have an auto-escalation feature.
The survey found 16.7% of respondents offer a comprehensive financial wellness program to employees.
Account balances increased by 18.2% since last year. More than 88% of eligible participants have an account balance, and 80.3% of eligible participants contributed to their plans.
Companies reported they contributed an average of 4.7% of pay to their plans in 2013 (up from 4.5% in 2012 and 4.1% five years ago) Eighty percent of plans make a match on employee contributions and 98% of those plans made the match in 2013.
Forty percent of plans that do not offer auto-enroll state that they are satisfied with their participation rates and one-third (32.5%) cite corporate philosophy as why they do not use it. The survey found plans with an auto-enroll feature have participation rates 10 percentage points higher than plans that do not.
“Plan sponsors are spending more time and effort to educate, promote and encourage saving for the long-term,” says PSCA Executive Director Robert Benish. “They are making great strides in adopting new plan design features, investments and financial wellness programs that are making a positive impact on participant outcomes.”
For further information, or to purchase a copy of the survey report, go to http://www.psca.org/57thAS_Report.