(Related: 12 Best States for Retirement: 2018)
Financial advisors working with sponsors of defined contribution plans may want to check out the findings of the 61st Annual Survey of Profit Sharing and 401(k) Plans from the Plan Sponsor Council of America to learn how the plans they work with stack up against the 600-odd plans participating in the survey.
According to the survey, based on 2017 data, nearly three-quarters of plans retain an independent investment advisor to assist with fiduciary responsibilities, up from almost 70% in 2016.
Both employers and employees have increased contributions and more employers have added new features to increase participation and savings rates such as automatic enrollment and contribution escalation.
“Design enhancements that leverage behavioral finance insights such as automatic enrollment, coupled with generous employer matching contributions, are helping build a more financially secure retirement for America’s workers,” said Hattie Greenan, PSCA’s Director of Research and Communications in a statement.
Indeed, employees contributed an average 7.1% to their defined contribution plans in 2017 while employers contributed a record high 5.1% of pay on average last year, bringing total savings for the average employee to more than 12% annually.