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401(k) Plans ARE Working.

PSCA’s latest survey shows that DC plans continue to grow, and millions are saving for retirement


Bob Benish

The Defined Contribution System has been successful in helping millions of Americans save significant assets for retirement. There is $7.8 trillion dollars in DC accounts and IRA rollovers that are providing retirement income to millions of retirees.

“Those critical of the DC system in the past thought that the system would collapse during a sharp economic downturn,” stated Bob Benish, PSCA’s Executive Director. “They were wrong. Was the system impacted the same way everything else in the economy was? Sure, but it is recovering and becoming stronger as both companies and participants are refocusing on saving and looking at more holistic approaches to financial wellness.” 

The results of 56th Annual Profit Sharing and 401(k) Survey from the Plan Sponsor Council of America demonstrate the continued success and improvement of the DC system. During the last couple of years, participation rates, deferral rates, and company contributions have increased steadily, and are now equal to or higher than they were before the recession:

  • 87.6 percent of eligible employees have a balance in the plan.
  • Participants are saving an average of 6.8 percent of pay (up from 6.4 percent in 2011, and 6.2 percent in 2010).
  • 95.3 percent of plans made the matching contribution in 2012, when provided for in the plan (up from 89.0 percent in 2010 and 85.2 percent in 2009). 
  • The average company contribution is now 4.5 percent of pay, up from 4.2 percent in 2011 and 3.7 percent in 2010.

Sponsors continue to add plan design features to help their employees save:

  • Roth after-tax contributions are now available at more than half of companies.
  • Automatic enrollment is used by nearly half of plans (47.2 percent), including 61.5 percent of large plans. 
  • More plans are using a default deferral percentage higher than 3 percent of pay (35.2 percent), and nearly 60 percent of plans automatically increase the default deferral percentages over time. 

In light of all that benefits professionals are handling, particularly in the last year with fee disclosure and health care reform, it is remarkable that they are finding the time to spend 401(k) plan education and financial wellness programs.  “It should be noted that through a collaborate effort of private industry, dedicated plan sponsors and service providers, they have created one of the best retirement systems in the world, and their work should be recognized and supported.  We believe that millions of Americans will be better prepared for retirement by saving through employer-sponsored retirement plans,” Benish stated. 

PSCA’s 56th Annual Survey reports on the 2012 plan-year experience of 686 plans with 10.3 million participants and $769 billion in plan assets. New topics in this year’s survey include:

  • Percentage of plans with a frozen DB plan. 
  • The average company contribution by type of contribution (match and non-match). 
  • Average number of funds offered per asset class. 
  • Glide paths and management styles of target date funds.
  • Percentage of plans offering comprehensive financial education programs. 

The survey is available for purchase at  For more information, contact PSCA at or 312.419.1863. 

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The Plan Sponsor Council of America (PSCA), a national, non-profit association of 1,200 companies and their six million employees, advocates increased retirement security through profit sharing, 401(k), and related defined contribution programs to federal policymakers. PSCA makes practical assistance available to its members with profit sharing and 401(k) plan design, administration, investment, compliance, and communication materials. PSCA, established in 1947, is based on the principle that “defined contribution partnership in the workplace fits today’s reality.” PSCA's services are tailored to meet the needs of both large and small companies with members ranging in size from Fortune 100 firms to small, entrepreneurial businesses.