Americans are socking away a higher percentage of their income in workplace retirement plans than ever before, according to a recent survey.
The Plan Sponsor Council of America (PSCA) surveyed 605 plan sponsors and found that employers are contributing an average of 5.1 percent of pay to their employees’ defined contribution plan accounts, the highest number ever recorded in the survey.
The average reported savings rate among participants was 7.1 percent, meaning that the average participant covered by the survey was saving the equivalent of 12 percent of their income in their 401(k) plan.
Nearly three quarters of plans, 73.1 percent, now use an independent advisor to assist with fiduciary responsibilities, up from 69.5 percent in 2016.
The PSCA’s survey also asked sponsors about plan design and features, finding that the availability of Roth 401(k) options to plan participants has doubled in the past decade. Now, 70 percent of all plans offer a Roth option to employees. Nearly two-thirds of plans use an automatic enrollment process, and 60 percent of plans with automatic enrollment use a default contribution rate of more than 3 percent.
Sponsors have also become more generous with their matching policies: The use of dollar-per-dollar matching above 3 percent of pay increased from 24.1 percent in 2016 to 35.8 in 2017.
According to the survey, more participants are now able to access their plans via a mobile app, with 43.6 percent of all plan sponsors offering a mobile option to their employees.