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

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Dec 03, 2014, 04:41 ET

CHICAGO, Dec. 3, 2014 /PRNewswire-USNewswire/ -- "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% 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

For further information, or to purchase a copy, go to PSCA.org or click the following link -- http://www.psca.org/57thAS_Report.

About the Plan Sponsor Council of America
The Plan Sponsor Council of America (PSCA) is a non-profit trade association supporting employer-sponsored retirement plans. For more than 60 years, PSCA has dedicated itself to serving the evolving needs of Defined Contribution (DC) plan sponsors who seek an unbiased source of industry information, education programs, and regulatory updates. Since its founding in 1947, PSCA has been on the forefront of protecting America's retirement system. Today, PSCA assists more than six million plan participants and provides its members with programs and services to help them better manage their company's retirement plans. For more information visit www.psca.org.

Press Contact:
Robert Benish
Plan Sponsor Council of America -- PSCA
Executive Director
(312) 419 - 1863
[email protected]

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SOURCE PSCA