In 2018, the average account balance in 401(k) plans hit an all-time high, according to the Plan Sponsor Council of America's 62nd Annual Survey of Profit Sharing and 401(k) Plans. The survey—now running into an astonishing sixth decade—offers arguably the most comprehensive look into the defined contribution space. BenefitsPRO compared data from the 58th Annual survey, which accounts for 2014, to the most recent data to help understand what changes in design features, if any, explain the 36 percent increase in the average account balance over just five years. Strong equity markets clearly provided more than a nudge, but they were actually down in 2018: the S&P 500 Index was dropped 6.59 percent in 2018; in 2014 it returned 11.7 percent. But plan design also clearly matters. Individual deferral rates are up in the past five years, and there has been a substantial shift in employers auto-enrolling at a 6 percent deferral rate, as opposed to 3 percent. Auto-escalation is increasing, and notably, so are employers' contributions as a percentage of company net profits. READ MORE: |
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
