The finance industry beat the nation as a whole when it came to retirement savings and employees of larger finance and insurance companies had higher average retirement-account balances than both their counterparts at smaller finance and insurance companies and Vanguard plans as a whole, a Vanguard report released on July 7 shows.
This year, for the first time, Vanguard also released industry-focused reports that analyze the behavior of plan participants in specific industries, including finance and insurance. The findings are part of Vanguard’s “How America Saves 2011,” the latest annual report to investigate retirement-planning trends that is based on 2010 data of more than 2 million plan participants.
Average participation in defined-contribution plans at finance and insurance companies was higher than the Vanguard average participation rate of 74 percent. Plan participation was 83 percent for larger finance and insurance firms (with more than 1,000 employees) and 82 percent for smaller finance and insurance companies (fewer than 1,000 employees).
At $96,658, the average retirement-account balance of staff in smaller finance and insurance companies was higher than those of participants in overall plans ($79,077) and larger finance and insurance company plans ($77,587).
The study also found that, in 2010, 64 percent of larger finance and insurance companies had an auto-enrollment plan versus 19 percent of the smaller companies and 24 percent of all Vanguard plans. The average deferral rate was 6.8 percent for smaller finance and insurance firm plans and Vanguard plans in aggregate last year. It was 6.6 percent for larger finance and insurance firms.