Employee contribution rates and account balances have gotten a boost from enhanced offerings that make it easier to save for retirement, according to a Deloitte survey. Plan sponsors and providers have expanded offerings to include automatic enrollment, step-up contributions, individual financial counseling, and mobile transaction processing. The number of plans offering step-up contributions increased substantially from 46% last year to 62% in 2015. Mobile transaction processing is available in 59% of plans (up from 52% in 2013 to 2014 and 25% in 2012.) This year’s survey was conducted with the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists.
Forty percent of plan sponsors said that the number one reason for employees give for participating in retirement plans this year is to save for retirement, surpassing last year’s top reason of taking advantage of the company match. Only 19% of plan sponsors expect most employees to be ready for retirement. Average account balances of participants grew in 2015 to $99,011, up almost 4% from $95,227 in 2013 to 2014. Employee contribution rates also increased. The median actual deferral percentage for non-highly compensated employees rose to 5.9%, a 13% increase over last year.
Plan sponsors and providers are using multiple tactics to encourage retirement savings and raise awareness of the income needed in retirement. The highest rated approaches are general and multiple communications/education at 83% (up from 73% in 2013 to 2014), followed by targeted communications at 68%, up from 56% in 2013 to 2014. Group meetings remained in the top three at 66%, up from 60% in 2013 to 2014.
Ninety-four percent of plan sponsors are offering some form of matching or profit-sharing contribution in their defined contribution plans, with 6% increasing the match. For the first time in five surveys dating back to 2009, 100% of respondent plan sponsors with discretionary matching made the matching contributions.