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Average Savings Rate, Roth 401(k) Participation Hit New Highs

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 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 percent of pay, up from 7.1 percent in 2017 and 6.8 percent in 2016. With company contributions coming in at an average of 5.2 percent in 2018, the average combined savings rate is now at 12.9 percent, up from last year’s record finding of a combined savings rate of 12.2 percent.

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

“Employer-sponsored retirement programs continue to demonstrate their value as the primary retirement savings vehicle for American workers,” said Hattie Greenan, PSCA’s Director of Research. “The flexibility and encouragement of design features incorporated by plan sponsors have clearly made these vehicles attractive and effective.”

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 percent of pay (rather than the traditional 3 percent) increased from 23.8 percent in 2017 to 29.7 percent 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:

  • In 2018, nearly half (47.5 percent) of plans allowed participants to conduct plan transactions from mobile devices, up from 43.6 percent in 2017 and 36.3 percent in 2016. 
  • While the majority of plans have long allowed rollovers of assets into the plan, nearly half (46.3 percent) 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 percent or higher. 
  • The percentage of participants taking a hardship withdrawal dropped from 2.3 percent in 2017 to 1.8 percent of participants in 2018. 
  • Fewer than ten percent of plans offer an annuity option to their participants (9.8 percent). 

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. To connect with Research Director Hattie Greenan about the survey’s findings, contact her at [email protected].

About the Survey
PSCA’s 62nd Annual Survey reflects the 2018 plan-year experience of 608 DC plan sponsors. For more information or to order a copy visit:


Hattie Greenan