Press Releases

PSCA’s Annual Survey Shows Company Contributions are Bouncing Back


Percentage of companies making contributions to the plan, as well as the average amount of those contributions, increased in 2011.

CHICAGO--(BUSINESS WIRE)-- The Plan Sponsor Council of America (PSCA) announced the release of its 55th Annual Survey of Profit Sharing and 401(k) Plans. The results of this year’s Annual Survey demonstrate continued confidence in the defined contribution system. The most significant finding of this year’s survey is that more companies and participants are putting money into their plans, and they are doing so at higher rates than in previous years.

The Annual Survey, which reports on the 2011 plan-year experience of 840 plans representing 10.3 million participants and $753 billion in assets, showed improvement in all key confidence indicators. The percentage of companies that made the matching contribution, when provided for in the plan, increased to 95.5 percent (up from 91.0 percent in 2010). Small companies in particular are bringing back the match with 92.8 percent of companies with fewer than 200 participants making the match in 2011, versus only 83.3 percent in 2010. The percentage of eligible employees making contributions to the plan also showed improvement, increasing from 76.9 percent in 2010 to 79.5 percent.

In addition to the increased number of companies and participants making contributions to the plan, the average amount of the contributions also showed improvement. The average company contribution increased to 4.1 percent of pay (up from 3.7 percent in 2010), and the average participant deferral rate increased from 6.2 to 6.4 percent of pay.

“The continued upward trend in participation and contribution levels is a result of the ongoing, sustained efforts of plan sponsors to effectively communicate their plan and educate their participants on the benefits of enrolling and staying in the plan,” said Bob Benish, PSCA’s Interim President and Executive Director. “Sponsors are looking beyond just increasing participation rates and are embracing plan design features that will make the plan more attractive to employees, while also making the plan more effective at increasing overall retirement readiness and financial health.”

Plan design features focused on increasing overall participant outcomes continued to grow in popularity, following the trend of the past few years.

  • Target-Date Funds: Availability increased from 61.5 percent to 68.6 percent of plans.
  • Roth 401(k): Roth after-tax contributions are now permitted in nearly half of plans (49.0 percent), up from 45.5 percent in 2010.
  • Automatic Enrollment Deferrals: Automatic enrollment is used by 45.9 percent of plans (up from 41.8 in 2010). The percentage of AE plans with a default deferral rate greater than 3 percent increased from 25.8 percent of plans in 2010 to 32.2 percent.

Other survey highlights include:

Asset Allocation

The average plan has approximately 60.6 percent of assets invested in equities. Assets are most frequently invested in actively managed domestic equity funds (24.8 percent of assets), target-date funds (12.4 percent), stable value funds (10.7 percent), indexed domestic equity funds (8.8 percent), and actively managed bond funds (8.0 percent).

Automatic Enrollment

45.9 percent of plans have an automatic enrollment feature. The most common default investment option is a target retirement date fund, present in 69.7 percent of plans.

Company Stock

15.5 percent of plans allow company stock as an investment option for both participant and company contributions.

Employee Eligibility

88.4 percent of U.S. employees at respondent companies are eligible to participate in their employer’s defined contribution plan. Most companies allow employees to begin contributing to the plan immediately upon hire (60.3 percent of companies).

Hardship Distributions

Hardship withdrawals are permitted in 90.5 percent of 401(k), 87.4 percent of combination, and 5.9 percent of profit sharing plans. 1.8 percent of participants took a hardship withdrawal in 2010, when permitted.

Investment Advice

Investment advice is offered by 57.8 percent of respondent companies. 19.3 percent of participants used advice when it was offered. Participant usage tends to be greatest in small plans.

Investment Advisors

68.2 percent of companies retain an independent investment advisor to assist with fiduciary responsibility.

Investment Options

Plans offer an average of 19 funds for both participant contributions and for company contributions. The funds most commonly offered to participants are actively managed domestic equity funds (90.3 percent of plans), actively managed international equity funds (87.4 percent of plans), indexed domestic equity funds (82.8 percent of plans), and actively managed domestic bond funds (79.6 percent of plans).


Loans are permitted in 89.0 percent of 401(k), 88.4 percent of combination, and 17.6 percent of profit sharing plans. 54.0 percent of plans with loans permit only one loan at a time.


The average percentage of eligible employees who have a balance in the plan is 85.9 percent. An average of 79.5 percent of eligible employees made contributions to the plan in 2011, when permitted.

Roth 401(k)

Among plans that permit participant contributions, 49.0 percent allow participants to make Roth after-tax contributions. 17.4 percent of participants made Roth contributions when offered the opportunity. The average Roth deferral (from ADP test results) was 3.7 percent by lower-paid participants and 4.9 percent by higher-paid participants.

Target-Date Funds

68.6 percent of plans offer a target-date fund as an investment options. The average allocation of plan assets is 12.4 percent.

Vesting Schedules

38.9 percent of plans provide immediate vesting for matching contributions, while 23.9 percent provide immediate vesting for profit sharing contributions.

The full report is available for purchase at

About the Plan Sponsor Council of America

PSCA, a national non-profit association of 1,200 companies and their six million employees, advocates increased retirement security through profit sharing, 401(k) and related defined contribution programs to federal policymakers. PSCA makes practical assistance available to its members with profit sharing and 401(k) plan design, administration, investment, compliance and communication materials. PSCA, established in 1947, is based on the principle that “defined contribution partnership in the workplace fits today’s reality.” PSCA's services are tailored to meet the needs of both large and small companies with members ranging in size from Fortune 100 firms to small, entrepreneurial businesses.

PSCA Interim President & Executive Director
Robert Benish, 312.419.1863

Source: Plan Sponsor Council of America