It’s no longer about simply getting workers to enroll in the company’s 401(k) plan. These days, an increasing number of firms are altering plan options to help workers ramp up contribution levels.
Aon Hewitt recently published its 2013 Trends & Experience in Defined-Contribution Plans, which offers a good picture of the types of 401(k) changes your peers are making.
The new employer match
The most drastic plan-design change involved the employer match.
This year, the most popular match offered by employers increased – the first time this has happened in the study’s 20-year history.
Almost one in five (19%) of employers now offer a dollar for dollar match on the first 6% of employee contributions, making this the most popular employer match.
That’s up from the 10% of firms that offered this match back in 2011.
A $0.50 match per $1 on the first 6% had been the most popular match up until this year’s study.
It’s also worth noting that virtually all (98%) employers offer some type of contribution to their company’s plan.
Another emerging trend among 401(k) plan sponsors: investment help for employees from a third party.
The study found 59% of plan sponsors now offer one-on-one financial counseling (59%) for their employees.
Some other highlights:
- 76% of firms now allow workers to start contributing to the 401(k) immediately (up from the 45% who did so back in 2001)
- 50% of firms offer a Roth option (up from just 11% in 2007)
- 86% of plans now offer target-date funds, and
- 59% of plans now use automatic enrollment.