More employers have added 401(k) matches, advice and automatic features to increase plan participation and encourage savings, according to data released today by Schwab Retirement Plan Services. The data is based on Charles Schwab's approximately 1.5 million company retirement plan participants.
Eighty-three percent of employers made 401(k) advice available to plan participants, up from 42% in 2005. The advice is available through Schwab's "Guided Choice" analysis tool, which makes asset allocation recommendations based on the participant's age, salary, outside financial assets and other factors, said Mike Peterson, a spokesperson for Charles Schwab.
There has also been a gradual increase over the past two years in the number of employers providing 401(k) matching contributions. In 2011, 73% of employers provided a 401(k) matching contribution, up from 68% in 2010 and 67% in 2009. Still, the percentage is off from 2007, when 75% were providing matches.
The use of automatic enrollments by employers is also up, according to the data.
In 2011, 42% of employers automatically enrolled employees into their 401(k) plans, up sharply from just 5% in 2005. Many of the employers using automatic enrollment (40%) also used automatic savings increases, up from 14% in 2006 and up from 36% in 2010.
"We are encouraged that more employers are recognizing the powerful impact these plan features can have on driving positive outcomes for their employees, particularly the impact of advice," Steve Anderson, senior vice president of Schwab Retirement Plan Services, said in a statement.