A new industry survey finds plan design enhancements in a number of significant areas.
Aon Hewitt's survey of more than 360 employers, representing over 10 million employees, finds that:
- More than 4 in 10 (42%) companies match dollar-for-dollar, up from 31% in 2013. Before 2013, $0.50 per $1.00 was the most common formula.
- Of the employers that automatically enroll their workers, 52% now automatically enroll workers at a savings rate of 4% or more, up from 39% of employers in 2013. Just over half (51%) now default workers at or above the company match threshold, nearly 10 percentage points higher than in 2013. Over the last two years, the percentage of companies who default at 6% has doubled, from 14% to 27%.
- Currently, 16% of employers automatically enroll all eligible employees on an ongoing (annual) or one-time basis — double the percentage that did so in 2013, according to the survey.
- One in 10 plan sponsors has re-enrolled workers into target-date funds, or is considering doing so by next year. And 17% of plans use customized target-date funds instead of a prepackaged product.
- Nearly three-quarters (72%) of plans have immediate eligibility for employee contributions (up from 51% in 2005). Just over half (52%) have immediate eligibility for employer match, up from 38% in 2005.
- Just 40% of plans use mutual funds with revenue-sharing fees, down from 83% in 2011, and 39% charge periodic dollar fees, up from 14% in 2011.
