By Stephen Bruce, PHR
Editor, HR Daily Advisor
Just My E-pinion
For years, BLR® has surveyed compensation and benefits professionals. This year, we have expanded our program with a series of brief, targeted benefits surveys. In today’s Advisor, we’ve got the results of the 401(k) survey. The findings are interesting and will help all readers see where their programs stand.
Companies Allowing Employees to Contribute More to 401(k) Plans
In a November 2009 survey of 401(k) practices, 68% of respondents reported that their company allows employees to contribute 25% or more of their earnings into their 401(k) plan. This is a significant increase over the 58% of respondents to BLR’s Survey of Employee Benefits in late 2006 that allowed such contribution levels.
While 22% of responding employers do not match employee contributions to the 401(k) plan, 32% match between 2% and 4% of salary, and 33% match up to 6% of salary contributed. Of those companies that match contributions, most match at least 50 cents on each dollar contributed.
The survey, conducted by BLR’s HR Daily Advisor, received over 1,000 responses, of which 75% originated from companies with fewer than 500 employees. The responses were evenly divided geographically within the United States and spread across all types of industries.
See what everyone’s talking about! Check out BLR’s remarkable everything-you-need-for-HR website, HR.BLR.com, at no cost or risk, and get a complimentary special report! Get more info.
Here are the detailed results:
Company offers a 401(k) Plan:
|
Yes |
93% |
|
No |
7% |
Maximum percentage of earnings an employee may contribute to the 401(k) Plan:
|
1% to 4.99% |
4% |
|
5% to 9.99% |
4% |
|
10% to 14.99% |
9% |
|
15% to 19.99% |
10% |
|
20% to 24.99% |
5% |
|
25% or more |
68% |
Maximum percentage of earnings against which company will make a matching contribution:
|
No matching |
22% |
|
Less than 2% of salary |
4% |
|
2% to 4% of salary |
32% |
|
4.01% to 6% of salary |
33% |
|
More than 6% of salary |
9% |
Extent to which company matches employee 401(k) dollar contributions:
|
No matching |
26% |
|
Less than 50 cents on the dollar |
15% |
|
50 cents on the dollar |
26% |
|
More than 50 cents on the dollar |
33% |
Company has reduced or suspended its 401(k) match in response to the recession:
|
No, we have left our match as is |
80% |
|
Yes, we have suspended our match |
16% |
|
Yes, we have reduced our match |
4% |
In companies that suspended match in 2009, those considering reinstating the match for 2010:
|
Yes |
50% |
|
No |
50% |
In companies that reduced match in 2009, those considering increasing the match for 2010:
|
Yes |
14% |
|
No |
86% |
Enrollment in 401(k) plan is automatic for new employees:
|
Yes |
31% |
|
No |
69% |
When employee enrollment is automatic, percentage of contribution is:
|
Less than 3% of salary |
30% |
|
3% of salary |
49% |
|
4% of salary |
9% |
|
5% of salary |
4% |
|
6% of salary |
4% |
|
More than 6% of salary |
4% |
Have you road-tested the biggest bargain in HR? Try HR.BLR.com at no cost or risk and receive a special report that’s yours to keep no matter what you decide. Get the details.
Number of investment options 401(k) Plan offers:
|
1 to 7 |
12% |
|
8 to 14 |
36% |
|
15 or more |
52% |
401(k) investment options include Target Date / Life Cycle funds:
|
Yes |
69% |
|
No |
31% |
Service requirement to be 100% vested in the 401(k) Plan:
|
Less than 3 years |
38% |
|
3 to 4 years |
16% |
|
5 or 6 years |
43% |
|
7 years |
3% |
Employees allowed to add “cash-outs” of unused vacation or sick time to their 401(k) accounts:
|
Currently Allowed |
4% |
|
Not Currently Allowed, but Considering |
3% |
|
Not Allowed |
92% |
Thanks to all who participated in the survey. Next up, a survey of child care and elder care. Comments on the 401(k) survey? Suggestions about what we should survey next? Let me know at sbruce@blr.com.