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FOR IMMEDIATE RELEASE

PSCA’s 57th Annual Survey Validates the Success of the Defined Contribution System

12/03/2014

Contact:
Bob Benish
312-419-1863
Bob.benish@psca.org

“The Plan Sponsor Council of America (PSCA) is pleased to see continued progress by millions of Americans who are saving for retirement in their employer-sponsored retirement plans, ” announced Robert Benish, PSCA Executive Director.  “Despite histrionics and uncertainly in the world around us, plan sponsors and their organizations are helping participants accumulate significant balances in their defined contribution plans,” Benish said.

“Plan sponsors are spending more time and effort to educate, promote, and encourage saving for the long-term,” Benish stated.  “They are making great strides in adopting new plan design features, investments, and financial wellness programs that are making a positive impact on participant outcomes,” Benish added.

The 57th Annual Survey of Profit Sharing and 401(k) Plans released by PSCA contains 179 tables of information representing 613 plans with eight million participants and $832 billion in plan assets.  Among the key findings in PSCA’s 57th Annual Survey are the following:


Participant Contributions 

  • 21.8 % of companies provide a suggested savings rate to employees. 18.8% suggest 6% and 46.5% suggest a rate higher than 6%. 
  • Account balances increased by 18.2%. 
  • 88.6% of eligible participants have an account balance.* 80.3% of eligible participants contributed to the plan. 
  • 60% of plans offer a Roth 401(k) option to participants, up from 53.8% in 2012. 

Company Contributions

  • Companies contributed an average of 4.7% of pay to the plan in 2013 (up from 4.5% in 2012 and 4.1% five years ago). 
  • 80.1% of plans make a match on employee contributions and 98 % of those plans made the match in 2013. 

Investments

  • Plans offer an average of 19 funds – the same as in 2011 and 2012.
  • 66% of plans offer a target-date fund to employees with an average of 16.7% of assets invested in them. 
  • 37.2% of plans offer an emerging markets fund to participants. 
  • Fewer than ten percent of plans are offering a lifetime income option to participants. 

Automatic Enrollment

  • 50.2% of all plans have an automatic enrollment feature (up from 47.2% in 2012), and 44% of all plans have an auto-escalation feature. 
  • 40% of plans that don’t offer auto enroll state that they are satisfied with their participation rates, and a third (32.5%) cite corporate philosophy as why they don’t use it. 
  • Plans with an auto-enroll feature have participation rates 10 percentage points higher than plans that do not. 

Education

  • 16.7% of plans offer a comprehensive financial wellness program. 
  • 80% of plans evaluate whether their plan is successful. 
  • One-third of plans made changes to their plan in 2013 – including almost half of large plans. 
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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.