Grim news of how little money Americans have saved for retirement makes headlines regularly. But one recent trend in employer-sponsored 401(k) plans could help change that.
The survey shows that 42 percent of companies now match at least a percentage of employee contributions dollar-for-dollar. That’s up from 31 percent in 2013. It’s also an improvement from before 2013, when matches of $0.50 per $1 were the most common type of employer match.
Rob Austin, director of retirement research at Aon Hewitt, states in a news release:
“With more workers falling short of their retirement savings needs, employers are being more aggressive about making plan design changes that will help workers close the savings gap. While these tweaks to the plan may seem small, they can have a profound impact on workers’ ultimate retirement wealth.”
The survey of more than 360 employers, representing more than 10 million workers, also reveals good news about employers’ automatic 401(k) plan enrollment of their workers, with most employers now doing it for new hires.
Additionally, 16 percent of employers now automatically enroll all eligible workers, a practice known as “back-sweeping.” That’s twice the percentage of employers that were back-sweeping in 2013.
To learn more about managing a 401k, check out:
- “Why You’re Stressed About Your 401(k) — and How to Get Over It“
- “5 Reasons to Find Your Orphaned 401(k) a New Home“
- “Is Getting a 401(k) Loan a Good Idea?“
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