Employers Adopting Features to Help Employees Save (back)
An analysis from Charles Schwab shows a growing number of employers are providing their employees with value-added 401(k) plan features that help drive positive plan participation and savings behaviors.
According to a Schwab news release, 81% of employers now make 401(k) advice available to plan participants, compared to just 42% in 2005. Seventy percent of employers currently include target date funds in their fund line-ups, compared to 57% in 2005.
In addition, the Schwab data shows 41% of employers automatically enroll participants, up dramatically from just 5% in 2005. These figures are even greater among larger companies. At companies with more than 2,500 participants, 57% use automatic enrollment.
Thirty-six percent of employers using automatic enrollment are also using automatic savings increases, up from 14% in 2006, when Schwab’s plan clients first began implementing automatic savings increases.
More than two-thirds (68%) of employers provide a 401(k) matching contribution, down from a peak of 76% in 2006.
“The 401(k) plan is now the primary source of retirement savings for an overwhelming majority of Americans,” said Catherine Golladay, Vice President of 401(k) participant services at Charles Schwab, in the news release. “We see more and more employers taking this responsibility seriously and looking for ways to provide additional support for 401(k) participants.”