Retirement plan accounts benefited from higher deferrals and fewer plan loans in 2014, according to the Plan Sponsor Council of America (PSCA). The PSCA, in its 58th Annual Survey, found that plan participants increased their deferrals and took less from their accounts through plan loans that year.
And the good news doesn’t stop there. According to the PSCA, so robust were deferral rates that they have done more than merely recover from the Great Recession — they exceeded even those of pre-recession days. Deferral rates were 5.8% of pay for lower-paid employees in 2014, 0.5 percentage points about the rate of 2012, the more recent previous year it studied.
Plan loans rose in 2008, the PSCA says, but seven years later 14.6% of plan participants have outstanding plan loan balances — the lowest level in more than 10 years. And the current loan balances collectively amount to less than 1% of plan assets, according to the report.
The PSCA attributes the improvement to plan participants who did not flee their plans nor stop contributing, and plan sponsors and providers educating participants on market volatility, asset allocation and target-date funds.
Still more good news: the PSCA reports that many plans follow policies and practices that facilitate and encourage participation and saving for retirement. These include:
And the good news doesn’t stop there. According to the PSCA, so robust were deferral rates that they have done more than merely recover from the Great Recession — they exceeded even those of pre-recession days. Deferral rates were 5.8% of pay for lower-paid employees in 2014, 0.5 percentage points about the rate of 2012, the more recent previous year it studied.
Plan loans rose in 2008, the PSCA says, but seven years later 14.6% of plan participants have outstanding plan loan balances — the lowest level in more than 10 years. And the current loan balances collectively amount to less than 1% of plan assets, according to the report.
The PSCA attributes the improvement to plan participants who did not flee their plans nor stop contributing, and plan sponsors and providers educating participants on market volatility, asset allocation and target-date funds.
Still more good news: the PSCA reports that many plans follow policies and practices that facilitate and encourage participation and saving for retirement. These include:
- 20% of plans use mobile technology to reach participants;
- part-time employees can participate in half of all plans;
- a majority of plans do not require employees to fulfill a certain period of service in order to receive matching employer contributions;
- 52.4% of all plans have instituted automatic enrollment;
- 62% of plans allow Roth contributions;
- 70% of large plans offer automatic enrollment; and
- more than 80% of plans use a qualified default investment option.
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