PSCA: DC, IRA assets nearing $8 trillion

“Was the system impacted the same way everything else in the economy was?” he adds. “Sure, but it is recovering and becoming stronger as both companies and participants are refocusing on saving and looking at more holistic approaches to financial wellness.” 

The results of PSCA’s “56th Annual Profit Sharing and 401(k) Survey” argues that defined contribution plans are achieving success in the marketplace and continue to improve. During the last couple of years, participation rates, deferral rates and company contributions have increased steadily and are now “equal to or higher than they were before the recession.”

According to PSCA:

•  87.6 percent of eligible employees have a balance in the plan.
•  Participants are saving an average of 6.8 percent of pay (up from 6.4 percent in 2011, and 6.2 percent in 2010).
•  95.3 percent of plans made the matching contribution in 2012, when provided for in the plan (up from 89.0 percent in 2010 and 85.2 percent in 2009). 
•  The average company contribution is now 4.5 percent of pay, up from 4.2 percent in 2011 and 3.7 percent in 2010.

The report adds that plan sponsors continue to add plan design features to help their employees save:

• Automatic enrollment is used by nearly half of plans (47.2 percent), including 61.5 percent of large plans. 
• More plans are using a default deferral percentage higher than 3 percent of pay (35.2 percent); and nearly 60 percent of plans automatically increase the default deferral percentages over time. 
• Roth after-tax contributions are now available at more than half of companies.