PSCA Publishes 61st Annual Survey of Profit Sharing and 401k Plans
CHICAGO, IL, December 11, 2018 -- As the 401k commemorates its 40th anniversary, new research from the Plan Sponsor of America (PSCA), part of the American Retirement Association (ARA), finds that employers are contributing an average of 5.1 percent of pay to their employees' 401k accounts, the highest ever recorded in the history of the survey, the longest running of its kind.
This rate of contribution, combined with an average savings rate by participants of 7.1 percent, gives a total savings rate of more than 12 percent - laying the foundation for better retirement outcomes, according to the 61st Annual Survey of Profit Sharing and 401k Plans.
The survey also found that plan sponsors continue to add design features to increase participation and savings rates, such as the availability of Roth contributions, which has doubled in the past decade and is now available at 70 percent of all plans - including small plans, which once lagged large plans in its adoption. Employers continue to embrace automatic enrollment, and more than half now do so with default deferral rates above the traditional three percent threshold - twice as many as a decade ago.
"The nation's best employers have long appreciated the value in offering a workplace retirement plan," noted Hattie Greenan, PSCA's Director of Research and Communications. "Design enhancements that leverage behavioral finance insights such as automatic enrollment, coupled with generous employer matching contributions, are helping build a more financially secure retirement for America's workers."
The 61st Annual Survey of Profit Sharing and 401k Plans also covers topics such as monitoring investment policy statements, alternative investment options, company stock, distribution and withdrawals, participant education and communication, recordkeeping and other plan administration practices. The report includes a comprehensive executive summary that examines the 10-year trends of key plan benchmarking data points.
About the Survey
PSCA's 61st Annual Survey reflects the 2017 plan-year experience of 605 DC plan sponsors. The full printed survey is available for pre-order (electronic copies are available now at https://www.psca.org/61st_AS).
About the Plan Sponsor Council of America
The Plan Sponsor Council of America (PSCA) is a diverse, collaborative community of employee benefit plan sponsors, working together on behalf of millions of employees to solve real problems, create positive change, and expand on the success of America's voluntary, employer-sponsored retirement system. With members representing employers of all sizes, PSCA offers a forum for comprehensive dialogue. By sharing our collective knowledge and experience as plan sponsors, PSCA also serves as a resource to policymakers, the media, and other stakeholders as part of its commitment to improving retirement security for millions of Americans. For more information, visit www.psca.org.
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