Results from a recently released Plan Sponsor Council of America study are very promising, showing improvements in many areas like deferral rates, auto features and matches. The study covers 686 plans with $769 billion and 10.3 million participants in calendar year 2012.
Highlights include:
• 87.6% of eligible employees had an account balance
• At 6.8%, deferral rates were up from 6.4% in 2011 and 6.2 % in 2011
• 95.3% of plan sponsors contributed to the plan, at an average of 4.5% of pay — up from 4.2% in 2011 and 3.7% in 2010
New features showing increased popularity include Roth 401(k)s, auto-enrollment and auto-deferrals:
• 47.2% of plans auto-enrolled, including 61.5% of “larger” plans
• 35.2% auto-deferred at greater than 3%, and 60% employed auto-escalation
Obviously, with an average plan size over $1 billion, the plans covered in the PSCA survey are very large (and may be more “enlightened” by virtue of their size and PSCA membership) but the results are encouraging nonetheless.
The study, which is available for purchase (click here), also covers:
• the percentage of sponsors with a frozen DB plan;
• the average company contribution by type of contribution (match and non-match);
• the average number of funds offered per asset class;
• glide paths and management styles of target date funds; and
• the percentage of plans offering comprehensive financial education programs.
