Employers are making some effort to enhance plan offerings. The majority of employers (84 percent) said they offered a matching contribution to their employee’s retirement savings plans, up from 80 percent in 2007. Default contributions in automatic enrollment plans, or plans that begin automatically upon employment and have to be opted out of, have also inched up. One in five employers said they offer automatic enrollment, with a median default contribution of 5 percent (up from 3 percent in 2017), according to the report.
There is an opportunity for many employers to increase employee access to retirement savings plans. Employers are optimistic, the study finds. Among companies who do not offer a 401(k) or similar retirement savings plan, 27 percent said they are likely to begin sponsoring a plan in the next two years.
Among smaller companies with no plans, there is some room for optimism. Twenty-five percent of employers who said they are not likely to offer a plan indicated they would consider joining a multiple employer plan (MEP) from a trusted vendor that would handle most of the fiduciary and administrative responsibilities.
“People now have the potential of living longer than any other time in history – which means that workers want and need to extend their working lives to fund what promises to be very long retirements. Our retirement system, including Social Security, employer benefits, and employment practices, should be modernized to embrace this new reality so that all workers have the opportunity to retire and grow old with a financial peace of mind,” said Collinson.
Workers surveyed in the study completed 25-minute online survey conducted between August 9 and October 28, 2017. The 6,372 respondents were U.S. residents, age 18 or older, full- or part-time workers in for-profit companies with five or more employees.
There were 1,825 employers who participated in the study and completed a 21-minute online survey conducted between November 15 and December 15, 2017. Respondents were business executives at for-profit companies with five or more employees, and make decisions about employee benefits at their company. The study focuses on employers with at least ten workers and their employees.