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PSCA: Savings Rate, Roth Participation Hit New Highs

Industry Trends and Research

American workers are saving more than ever in their company-sponsored retirement plans, and a growing number are taking advantage of the opportunity to save in a Roth 401(k) option, according to new data from the Plan Sponsor Council of America (PSCA), part of the American Retirement Association (ARA). 

PSCA’s 62nd Annual Survey of Profit Sharing and 401(k) Plans, the longest running survey of its kind, finds participant deferrals rose last year to an average of 7.7% of pay, up from 7.1% in 2017 and 6.8% in 2016. With company contributions coming in at an average of 5.2% in 2018, the average combined savings rate is now at 12.9%, up from last year’s record finding of a combined savings rate of 12.2%. 

The survey, reporting 2018 plan activity, finds that nearly a quarter of participants (23%) elected to contribute to a Roth when given the opportunity, up from 19.5% in 2017 and 18.1% in 2016 – an increase of nearly 30% in just three years. Nearly 70% of plans now provide a Roth 401(k) option.

Even as an increasing number of employers make it easier for workers to join these programs via automatic enrollment, the survey finds the percentage of those plans using a default deferral rate of 6% of pay (rather than the traditional 3%) increased from 23.8% in 2017 to 29.7% in 2018. At the same time, nearly a third of automatic enrollment plans now automatically increase deferral rates over time.

The survey also found that:

  • While the majority of plans have long allowed rollovers of assets into the plan, nearly half (46.3%) are now actively encouraging employees to do so. 
  • A third of plan sponsors are communicating specific savings targets to participants – and for nearly half of those, it’s a number 10% or higher. 

The 62nd Annual Survey of Profit Sharing and 401(k) Plans, the longest running survey of its kind, 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. 

You can find out more about the survey – and order a copy for your own benchmarking purposes – at