The Profit Sharing Council of America (PSCA) has released its 55th Annual Survey of Profit Sharing and 401(k) Plans. The results of the 2012 survey — which reports on the 2011 plan-year experience of 840 plans representing 10.3 million participants and $753 billion in assets — demonstrate continued confidence in the defined contribution system. The most significant finding of this year's survey is that more companies and participants are putting money into their plans, and they are doing so at higher rates than in previous years. Specifically:
• more companies are providing matches at a higher level;
• deferrals are at 6.4%, up from 6.2% in 2010;
• participation rates are at 80%, up from 77%;
• 68% of plans use TDFs, up from 61%;
• auto-enroll deferrals are used by 46% of plans, up from to 42%;
• 32% of companies are deferring more than 3%, up from 26%;
• auto enrollment is used by 46% of plans, up from 42%;
• 70% of plans using a default option offer TDFs; and
• investment advice is offered by 58% of plans, with only 19% of participants using it (although the usage is greater in small plans).
So things are improving, but DC plans still need to progress to increase the percentage of participants on track to retire comfortably. We like Professor Shlomo Benartzi’s prescription of 90-10-90 — that is, 90% participating, 10% deferral rates and 90% in packaged products.
