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Participants Putting More Money in Workplace Retirement Plans, Taking out Less

Participant deferral rates the highest in years and loan usage the lowest, according to PSCA’s 58th Annual Survey.


Hattie Greenan

Chicago (January 11, 2016) – During the market decline in 2008, many DC plan participants saw their retirement savings accounts drop significantly. Critics of defined contribution retirement plans used the opportunity to attack the private, employer-sponsored system. Though the system is not perfect, it has recovered and adapted, and so have plan participants. Many thought employees would flee their plans or stop contributing, but that is not the case. Due in large part to plan sponsors and providers educating participants on market volatility, asset allocation, and target-date funds, employees continue to save, and are saving more, in their employer-sponsored plan.    

Participation rates have remained steady the last several years with about 88 percent of eligible participants having an account balance, and 80 percent making contributions to the plan.  

Deferral rates increased back to pre-crash levels, and are in fact higher, increasing from 5.3 percent of pay in 2013 to 5.8 percent of pay for lower-paid employees according to ADP testing. 

Though there was an increased use of plan loans in 2008, the percentage of participants with loans and the percentage of assets loaned have been decreasing and have reached their lowest rates in more than a decade – just 14.6 percent of participants have an outstanding loan balance and only 0.7 percent of all plan assets are held in loans. 

“The increase in savings rates by participants and the steady plan participation rates demonstrate that participants value their company’s retirement plan,” said Hattie Greenan, Director of Research and Communications.  “The fact that loan usage has decreased while savings rates increased indicate that education about how plans and markets work is working.” 

Other key findings include:

  • Nearly all full-time employees are eligible to participate in the plan (99 percent), and half of plans allow part-time employees to participate. 
  • More than half of plans (51.0 percent) do not have a service requirement to receive matching contributions. 
  • More than 60 percent of plans now allow Roth contributions (62 percent). 
  • One-quarter of plans suggest a target deferral rate to participants. Of those, half suggest a rate higher than 6 percent. 
  • More than 80 percent of plans use a qualified default investment option. The QDIA is a target-date fund in three-fourths of these plans. 
  • 70 percent of large plans (5,000 or more participants) use automatic enrollment (52.4 percent of all plans use it, up from 50.2 percent in 2013).
  • 20 percent of plans are using mobile technology to reach participants (including 30 percent of large plans). 

PSCA’s 58th Annual Survey reflects the 2014 plan-year experience of 592 DC plan sponsors. The survey is available for purchase at 

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The Plan Sponsor Council of America (PSCA) is a diverse, collaborative community of employee benefit plan sponsors, working together on behalf of more than six million employees to solve real problems, create positive change, and expand on the success of the employer-sponsored retirement system. With more than 1,000 members representing employers of all sizes, we offer a forum for comprehensive dialogue. By sharing our collective knowledge and experience as plan sponsors, PSCA also serves as a resource to policymakers, the media and other stakeholders as part of our commitment to improving retirement security for millions of Americans.