Credit: Alexander Zaitsev/Adobe stock
Retirement plan participation and savings rates ticked upward in 2023, according to PSCA’s 67th Annual Survey of 401(k) Plans (reflecting 2023 plan-year data). The survey showed that participants and employers contributed more to 401(k)s in 2023 than the year before (though not yet back to 2021’s record levels). It’s unclear why rates improved, but “certainly employer support of retirement programs including automatic enrollment, ongoing financial education, and some stability in certain job markets contributed to strong savings rates in 2023,” said Hattie Greenan, director of research and communications for PSCA.
The PSCA survey, now in its sixth decade, focused on the 2023 plan-year experience of 709 profit sharing plans, 401(k) plans, and combination profit sharing/401(k) plans. Seventy percent of companies allow full-time employees to begin contributing to the plan within three months of hire and 60% allow part-time employees to do so.
Recommended For You
SECURE 2.0 implementation
“Employers and participants contributed more to their plans in 2023 after slipping off record highs in last year’s survey,” said Greenan. “While maintaining contributions, employers were also focused on implementing design features and optional provisions of both SECURE Acts to best help their participants balance immediate financial needs with long term financial security.” Participants contributed an average of 7.8% of pay (up from 7.4%), and employers contributed 4.9% of pay (up from 4.7%) for a combined savings rate of 12.7% of pay; 13% of plans automatically reenroll nonparticipants annually – up from 4% of plans 10 years ago.
While savings rates increased in 2023, plan sponsors were focused on implementing mandatory provisions of SECURE 2.0 and deciding which optional provisions to implement Acts to best help their participants balance immediate financial needs with long-term financial security. The optional provisions regarding 401)k distributions seem to be the most popular SECURE 2.0 provisions, with little uptake (so far) on most of the others, according to the report.
The optional provisions regarding distributions seem to be the most popular SECURE 2.0 provisions with 72% allowing distributions for natural disasters, more than half (52.3%) adopted the distribution in the event of a qualified birth or adoption, and nearly half (48.9%) adopted the distribution in the event of a terminal illness diagnosis.
Only 2% of plans are adding an employer match on student loan payments and less than 1% are adding a pension-linked emergency savings account. “Some employers do not have a large portion of college-educated employees where this is applicable, while others are waiting for some of the administrative complexities to work out over time and are looking to add in the future, and other provide student loan support outside of the plan,” said Greenan.
“We expect to see use of this feature increase over time, at least in certain industries.”
“The increase in plan savings and participation rates reflects the overall strength of the 401(k) system, particularly in the face of economic headwinds and uncertainty,” said Will Hansen, PSCA’s executive director. “The flexibility that SECURE 2.0 offers employers in designing plans to meet both company goals and the needs of their participants will continue to reshape retirement and increase the financial security of retirees.
Cybersecurity policies
Cybersecurity continues to be a focus for plan sponsors — the use of a written cybersecurity policy increased to 31% of plans, up from 22% three years ago. Sixty percent of organizations initiated a cybersecurity awareness campaign in 2023, 71.7% use multi-factor identification, and 31% have a written cybersecurity policy (up from 22.5% three years ago). More than 40% of large plans have adopted a cybersecurity guarantee offered by the recordkeeper, yet only 9.5% of small plans have done so.
Related: 2025 retirement industry trends: What a Trump return means for 401(k) savings
“Having a [cybersecurity] policy in place that is followed is considered a best practice,” said Greenan, “and the DOL indicated earlier this year that cybersecurity policies would be a focus on plan audits going forward."
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
