More employers are providing employees with 401(k) plan features aimed at encouraging plan participation and savings, according to a survey by Schwab Retirement Plan Services released yesterday.
According to Schwab survey data, 73 percent of employers provided a 401(k) matching contribution, up from 68 percent in 2010. In addition, 83 percent of employers made 401(k) advice available to plan participants, compared with 42 percent in 2005. The survey also reported that 42 percent of employers automatically enrolled employees into their 401(k) plan, up from 5 percent in 2005. At companies with more than 2,500 employees in the plan, 58 percent used automatic enrollment.
In addition, 40 percent of employers that use automatic enrollment also use automatic savings increases, up 14 percent from 2006, and 36 percent from 2010. Schwab data also indicates that employees who use independent professional advice services inside their 401(k) plan have tended to save twice as much, were better diversified and stuck to their long-term plan, even in the most volatile market environments.
Financial services provider Charles Schwab Corp. handles an estimated 8.7 million client brokerage accounts, 1.5 million corporate retirement plan participants, 829,000 banking accounts, and $1.82 trillion in client assets. Schwab Retirement Plan Services consists of Schwab Retirement Plan Service, Inc. and Schwab Retirement Plan Services Company, which provide recordkeeping and related services to retirement plans.