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401(k) contributions up in 2013

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Contributions to 401(k) plans were up $13 billion in 2013 from the previous year, according to analysis from Judy Diamond Associates.

The five percent year-over-year increase in 2013 represents contributions from employees and employers, and is the most recent year for which data is available.

Employer matches were roughly $96 billion in 2012, while employees contributed $174 billion. In 2013, employer matches hit $101 billion, and employees increased their deferrals to $182 billion.

The increases represent a continuing positive trend since 2011, according to Eric Ryles, managing director of JDA, which is owned by ALM, BenefitsPro’s parent company.

“This indicates both companies and the people who work there are feeling better about the economy overall,” Ryles said. “They feel they have more to invest in their futures.”

Delaware had the highest average employer contributions in 2013, at $3,114. The District of Columbia, Wyoming, Minnesota and New Jersey rounded out the top five, with average employer contributions in the Garden State coming in at $2,428.

New Jersey led the way with the highest average employee contributions, at $4,436, slightly above California’s average participant deferral of $4,511. Maine, Washington and Delaware rounded out the top five states with the highest average employer contributions.

While total contributions were up in 2013, sponsors established almost 1,000 fewer new plans compared to 2012, according to data mined from Form 5500s.

The 23,056 plans launched in 2013 represented a 5 percent decline from 2012, meaning 434,000 workers had new access to a defined contribution plan. By the end of 2013, new plans held $4 billion in assets.

But only 58 percent of eligible workers took advantage of newly adopted plans. The average employee contribution to the new plans was $1,980 and totaled $861 million. Employers chipped in about $491 million to new plans.

California, New York and Texas, states with the most businesses and people, accounted for one-third of all new plans, adding 7,266.

As a percentage of new plans, Nevada accounted for 6.29 percent of new plans, more than any other state.