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Workers Got the Hints, Felt the Nudges – Part 1

By Jack Towarnicky

PSCA’s 61st Annual Survey
The First Time the Average Contribution Percentage Exceeded 7 Percent

The average deferral percentage in PSCA’s 61st Annual Survey was 7.1 percent. Why the increase? Survey data confirm:

  • Increases in new hire automatic enrollment,
  • Higher default contribution percentages when deploying automatic features, and
  • Increases in automatic escalation.

We’ve seen substantial improvement in non-highly-compensated employee savings rates. The non-highly compensated average deferral percentage (including zeroes for eligible non-participants) has gradually increased over time:


  • Averages may be deceiving. However, because the ADP test has remained relatively unchanged, that isn’t very likely here.
  • Generalizing from a sample to the entire retirement marketplace may be misleading. However, our survey’s results are somewhat confirmed by similar results/trends in other surveys showing higher participation and contribution rates.
  • Workers who fail to save may experience a “retirement savings” or “retirement preparation” crisis. A minority who are eligible for an employer-sponsored plan do not contribute. Others who are not eligible for an employer-sponsored plan do not contribute to an IRA.1 So, while the retirement savings marketplace still has a long way to go, “People have within their own hands the tools to fashion their own destiny.”2

Plan sponsors, you are making great progress. Stay the course.


1DC Plans: Can Everyone Win? 10/20/17, Accessed 1/1/19 at: See also: Retirement in America - Individual Account Retirement Savings Plans ARE Good Enough! 7/5/18, Accessed 1/1/19 at:
2M. D. Lincoln, Vice President in Charge of Revolution, 1960


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