American employers are doing more to engage their pension plan members.

According to research by U.S.-based financial services provider Charles Schwab, 81% of U.S. employers are now offering 401(k) advice for plan participants, compared to just 42% in 2005.

Other significant findings include:

  • 70% of employers include target date funds in their fund line-ups, compared to 57% in 2005.
  • 41% of employers automatically enroll participants, compared to just 5% in 2005.
  • Large companies are even more likely to auto-enroll participants; 57% of companies with more than 2,500 participants use automatic enrollment.
  • 36% of employers using automatic enrollment are also using automatic savings increases, up from 14% in 2006.

“The 401(k) plan is now the primary source of retirement savings for an overwhelming majority of Americans,” says Catherine Golladay, vice-president of 401(k) participant services at Charles Schwab.

“We see more and more employers…looking for ways to provide additional support for 401(k) participants….Employers are focusing more on those tools that clearly drive results, like advice, automatic enrollment and automatic savings increases.”

However, while auto-enrollment and value-added services are up, the number of organizations offering a 401(k) matching contribution is down, at 68%, compared to 76% in 2006.

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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