Yesterday we learned about the importance of persistent participation in a 401(k) savings plan and encouragingly, a new study from the Society for Human Resource Management (SHRM) suggests that many Americans have access to such a retirement benefit through their employer. Specifically, 94 percent of surveyed organizations reported that they currently offer their workers some type of retirement plan, of which 90 percent said that they offer a traditional 401(k) or similar defined contribution (DC) savings plan. Roughly half (51 percent) of the organizations that offer retirement plans to help employees prepare financially for the future said that they provide access to a Roth 401(k), up from 34 percent in the 2012 survey, and just a quarter of firms offer a defined benefit (DB) pension plan. Thirty-eight percent of firms said that they automatically enroll their new employees into DC plans, 21 percent reported that they use reenrollment to add workers not currently participating in their DC plans, and 19 percent said that they automatically escalate participants’ plan-related salary deferrals. Three-quarters of employers that provide workers with access to a traditional 401(k) or similar retirement plan also make some sort of matching contribution, and 37 percent do the same for their Roth-style offerings.
Seventy percent of organizations that provide retirement benefits enable workers to make catch-up contributions, 60 percent offer hardship withdrawals, and 44 percent allow for DC plan loans. All of those figures are down slightly from the previous year’s survey. Two thirds of organizations offer some form of investment guidance to their workers, and 45 percent provide advice specific to retirement preparation. Forty-seven percent of these firms offer one-on-one counseling, 41 percent do so in a group/classroom setting, and half make the advice available online. Beyond retirement, overall benefits packages have improved recently, with 33 percent of surveyed employers reporting that they increased their benefits offerings during the last twelve months. Just 7 percent reported a decrease and among these employers, two-thirds said that they made cuts to their healthcare-related benefits. As for the employers who expanded their benefits offerings during the past year, the majority did so in the areas of healthcare and general wellness but retirement and paid leave experienced sizable increases as well. Another interesting finding from the report is that compared with five years ago, more organizations are currently offering monetary bonus benefits, e.g. referral bonuses, retention bonuses for nonexecutives, etc., another sign of a tightening labor market. Further, 60 percent of surveyed employers said that they offer telecommuting as a benefit, a significant increase from 20 percent in 1996 when this study began.
Sources: Society for Human Resource ManagementPost author: Charles Couch