April 30, 2010

HR Fact Friday: Employers Allowing Larger 401(k) Contributions

Filed under: Retirement — Tags: , , — Paul @ 8:32 am

Sixty-eight percent of employers report that their company allows employees to contribute 25% or more of their earnings into their 401(k) plan, according to a recent survey of 401(k) practices by BLR.

This is a significant increase over the 58% of organizations that allowed such 401(k) contribution levels in BLR’s Survey of Employee Benefits in late 2006.

While 22% of responding employers do not match employee 401(k) contributions, 32% match between 2% and 4% of salary, and 33% match up to 6%. Of those organizations that match 401(k) contributions, most (59%) match at least 50 cents on each dollar contributed.

The survey, conducted by BLR’s HR Daily Advisor in November 2009, 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.

For detailed survey results, see the 401(k) Practices Survey Results.

Source: HR.BLR.com

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April 12, 2010

What Was the Average Employee 401k Contribution for 2009?

Filed under: General HR Buzz — Tags: — Jane @ 2:17 pm

A. 2.74%                B.  4.36%
C. 6.86%               D. 5.11%

According to the HR consultant Mercer, the average 2009 employee contribution was 6.86%.   That had declined from the average 2007 contribution of 7.46%.   As might be expected, those 55 and older contributed more, 8.86% and those under 30, less at 4.04%.   At the end of 2009, 31% of participants had account balances below 2007 levels.  Those 55 and over, with larger account balances were hurt the most.

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November 6, 2009

HR Fact Friday: Survey Finds Service Requirements for Joining 401(k) Easing

Filed under: Benefits,Retirement — Tags: , , , , , — Paul @ 10:18 am

Employers are improving access to their 401(k) plans, according to a survey released Wednesday, November 4.

The Hewitt Associates Inc. survey of 300 midsize to large employers found that 74 percent of 401(k) plans do not have a service requirement, up from 61 percent in a comparable survey Hewitt conducted in 2007.

In addition, looking at plans with employer matching contributions, 56 percent of plans in 2009 did not have any service requirements for participants to receive the match, up from 44 percent in 2007.

On the other hand, 10 percent of employers have suspended their matching contributions during the past two years, the survey found.

Employers continue to move away from investing matching contributions exclusively in company stock. Just 17 percent of employers do so, down from 23 percent in 2007 and 45 percent in 2001.

That downward trend coincided with the collapse of one-time energy giant Enron Corp.

Enron matched employees’ deferrals exclusively with company stock and barred employees until age 50 from divesting those shares, leaving thousands to watch helplessly as the value of their shares plunged to virtually nothing.

The survey found a big increase in the number of employers offering an automatic enrollment feature.

Such programs are geared to those employees—typically new hires—who don’t indicate whether they want to enroll in their employer’s 401(k) plan. With automatic enrollment, those employees are enrolled unless they specifically object.

In 2009, 58 percent of employers offered automatic enrollment, up from 34 percent in 2007 and 19 percent in 2005. Of those employers using automatic enrollment, 69 percent default employees into a target-date fund, up from 50 percent in 2007.

The funds are so named because the investment mix is adjusted over time, with a more aggressive allocation for funds with retirement target dates further in the future and more conservative asset allocations for retirement dates that are closer.

A summary of the survey, “Trends and Experience in 401(k) Plans,” is available online at www.hewitt.com.
Source: Jerry Geisel of Business Insurance, a sister publication of Workforce Management

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April 3, 2009

HR Fact Friday: 60% of Older Workers Delay Retirement

Filed under: Retirement — Tags: , , , , — Paul @ 10:35 am

While the economic crisis is being felt by nearly every segment of the working population, one group of workers is faced with particularly tough decisions regarding their futures. 60% of workers over the age of 60 say they are putting off their retirement because of the impact of the financial crisis on their long-term savings, according to a survey by recruitment firm CareerBuilder.  The survey was conducted among more than 8,000 full-time U.S. workers ages 18 and over between Nov. 12 and Dec. 1, 2008.

(more…)

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