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PSCA Releases Results of 59th Annual Survey of Profit Sharing and 401(k) Plans

Employee Participation and Deferral Rates See Steady Increase; Participation up Five Percent Since 2010


Hattie Greenan


  • Nearly 90 percent of employees are eligible to participate in their employer’s plan
  • Average percentage of eligible employees who participate in their plan is 87.6 percent
  • Company contributions average 4.7 percent of gross annual pay
  • Allocation to target-date funds increased to nearly 20 percent of assets
  • Roth 401(k)s are now allowed by 60 percent of plans* Automatic enrollment is offered in 57.5 percent of plans
  • More than half of plans that use Automatic Enrollment offer a default deferral rate higher than 3 percent of pay

Participation and deferral rates in Defined Contribution Profit Sharing and 401(k) Plans posted steady increases in the most recent annual survey published by the Plan Sponsor Council of America (PSCA). PSCA is the leading independent source of information and education on qualified retirement plans.

“Company sponsored retirement plans continue to grow participation and deferral rates,” said Hattie Greenan, Director of Research and Communications. “By designing plans that include features such as automatic enrollment and options such as target date funds and Roth 401(k), plan sponsors are helping to advance the interests of all participants and grow America’s retirement savings.”

Respondents to the survey report that almost 90 percent (89.4 percent) of US employees are eligible to participate in their employer’s defined contribution (DC) plan. 

The average percentage of eligible employees who have a balance in their plan is 87.6 percent, and 81.9 percent made contributions to their plan in 2015. This is up 5 percent over 2010. The average salary deferral (pre- and after-tax) for all eligible participants was 6.8 percent. Lower paid participants contributed an average of 5.5 percent of pre-tax pay, while higher-paid participants averaged 7.0 percent.

Plan Sponsors
The average company contribution to 401(k) plans is 3.8 percent, and the average contribution in combination 401(k)/profit sharing plans is 5.4 percent. 

The survey found 66.8 percent of companies retain an independent investment advisor. Of those, 59.1 percent pay a fixed fee and 35.1 percent pay a percent of plan assets.

The majority of plan expenses are paid by the company with the exception of recordkeeping and investment consultant fees.  

Investment Offerings and Allocation
Plans offer an average of 19 funds, a number that has remained steady over the last five years. The funds most commonly offered are indexed domestic equity funds (79.3 percent of plans), actively managed domestic equity funds (78.0 percent of plans), actively managed domestic bond funds (74.7percent of plans), and actively managed international equity funds (73.4 percent of plans).  

Assets are most frequently invested in actively managed domestic equity funds (21.4 percent of assets), target date funds (19.8 percent), indexed domestic equity funds (12.4 percent), stable value funds (8.1 percent), and balance funds (6.5 percent). The average allocation to target-date funds (19.8 percent of assets), which are offered by 63.2 percent of plans, is up from only 4.1 percent ten years ago.

Advice and Automatic Features
The survey found that 34.6 percent of respondents offered investment advice. Advice was offered by a registered investment advisor (28.8 percent), a certified financial planner (27.8 percent), or a third-party web-based provider (16.6 percent).  

Respondents reported that 57.5 percent of plans have an automatic enrollment feature. This is most common in large plans (66.7 percent), while only 25.5 percent of plans with fewer than 50 participants have automatic enrollment. More than half of plans with automatic enrollment use a default deferral rate more than 3 percent up from 40.4 percent of plans in 2014. The most common default option is a target retirement date fund.

The 59th Annual Survey of Profit Sharing and 401(k) Plans also covers topics such as recordkeeping, monitoring investment policy statements, company stock, plan loans, distribution and withdrawals, participant education and communication, and plan expenses. The report has been redesigned this year with a comprehensive executive summary that examines the 10-year trend of key plan benchmarking data points. To talk with research director Hattie Greenan about the survey’s findings, email 

About the Survey
PSCA’s 59th Annual Survey reflects the 2015 plan-year experience of 614 DC plan sponsors. The survey is available for pre-order (electronic copies are available now).

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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 millions employees to solve real problems, create positive change, and expand on the success of the employer-sponsored retirement system. With 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. For more information, visit