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PSCA Releases 57th Annual Survey of the 401k System

By Rick Meigs, President, 401khelpcenter.com

    

Every year, the Plan Sponsor Council of America (psca.org) surveys hundreds of profit sharing and 401k plans to identify trends and report on the popularity of various plan design features.

This year, 613 plans with eight million participants and $832 billion in plan assets were surveyed. The report contains 179 tables of data on topics such as:

  • Automatic Enrollment
  • Company Contributions
  • Company Stock
  • Employee Eligibility
  • Hardship Withdrawals
  • Investment Availability and Allocation
  • Investment Advice
  • Loans
  • Participation Rates
  • Professionally Managed Accounts
  • Roth Features
  • Target-Date Funds
  • Vesting Schedules

"Plan sponsors are spending more time and effort to educate, promote, and encourage saving for the long-term," stated Robert Benish, PSCA Executive Director. "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."

Among the key findings in the survey are the following:

Participant Contributions

  • 21.8 % of companies provide a suggested savings rate to employees. 18.8% suggest 6% and 46.5% suggest a rate higher than 6%.
  • Account balances increased by 18.2%.
  • 88.6% of eligible participants have an account balance.
  • 80.3% of eligible participants contributed to the plan.
  • 60% of plans offer a Roth 401k option to participants, up from 53.8% in 2012.

Company Contributions

  • Companies contributed an average of 4.7% of pay to the plan in 2013 (up from 4.5% in 2012 and 4.1% five years ago).
  • 80.1% of plans make a match on employee contributions and 98 % of those plans made the match in 2013.

Investments

  • Plans offer an average of 19 funds, the same as in 2011 and 2012.
  • 66.6% of plans offer a target-date fund to employees with an average of 16.7% of assets invested in them.
  • 37.2% of plans offer an emerging markets fund to participants.
  • Fewer than ten percent of plans are offering a lifetime income option to participants.

Automatic Enrollment

  • 50.2% of all plans have an automatic enrollment feature (up from 47.2% in 2012), and 44% of all plans have an auto-escalation feature.
  • 40.0% of plans that don't offer auto enroll state that they are satisfied with their participation rates, and a third (32.5%) cite corporate philosophy as why they don't use it.
  • Plans with an auto-enroll feature have participation rates 10 percentage points higher than plans that do not.

Education

  • 16.7% of plans offer a comprehensive financial wellness program.
  • 80.0% of plans evaluate whether their plan is successful.
  • One-third of plans made changes to their plan in 2013, including almost half of large plans.

You can order the full report here: http://www.psca.org/57thAS_Report .


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