Plan Sponsors Ask…

July 27, 2018 | posted in: Plan Sponsor Corner | by
Q. We’d like to bolster our 401(k) plan participation and contribution numbers. What are some of the reasons people don’t participate or don’t contribute enough?


A. That has been the subject of recent research by the Pew Charitable Trusts. They looked at employer and employee perspectives on saving, and made some interesting findings.

For example, two-thirds of employees at small to midsized companies have access to a retirement plan at work, and 68% participate. That translates to 45% of workers at small to midsized businesses participating in a 401(k) or similar plan – and 55% not participating. The research found it much more likely for employees with a household income over $100,000 to participate than for lower income workers. The higher income employees may find it easier to save, and are more likely to need the tax breaks associated with saving in a qualified plan. Even though auto features tend to increase participation and contribution levels, a significant percentage of plans at small to midsized companies don’t use them. The concern is often that employees won’t like it – a perception that has been refuted by other research. Take a look at the Pew website for more information at Please contact our office if you would like to add an Auto Enrollment feature to your plan.