Press Releases:
More Employers Adding 401(k) Plan Features to Drive Participation and
Savings, Says New Schwab Data
August 24, 2010 09:00 AM Eastern Daylight Time
SAN FRANCISCO - (August 24, 2010) - Charles Schwab, a 401(k) provider to approximately 1.5 million company
retirement plan participants, today released new insights into the
growing number of employers providing their employees with value-added
401(k) plan features that help drive positive plan participation and
savings behaviors.
"For many 401(k) investors, the 401(k) is their primary retirement
savings vehicle, so it is important that employers continue to make
available plan features that drive better participation, savings levels
and outcomes"
According to data collected from 401(k) plans serviced by Schwab
Retirement Plan Services, Inc. through the first half of 2010:
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Nearly three-quarters (74%) of employers make 401(k) advice available
to plan participants, as compared to 42 percent in 2005.
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More than three-quarters (76%) of employers currently include target
date funds in their fund line-ups, compared to 57 percent in 2005.
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Thirty-eight percent of employers automatically enroll participants,
up dramatically from just five percent in 2005. An even greater number
of larger companies automatically enroll participants. Among companies
with more than 2,500 participants, 53 percent use automatic enrollment.
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Thirty-seven percent of employers using automatic enrollment are also
using automatic savings increases, up from 14 percent in 2006, when
Schwab's plan clients first began implementing automatic savings
increases.
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Sixty-nine percent of employers provide a 401(k) matching
contribution, down from a peak of 76 percent in 2006.
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Feature Adoption Rates (2005 through June 30, 2010)
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Feature
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2005
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2006
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2007
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2008
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2009
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06/30/2010
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Participant Advice
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42%
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56%
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62%
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66%
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74%
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74%
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Target Date Funds
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57%
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62%
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70%
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73%
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75%
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76%
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Automatic Enrollment
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5%
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14%
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25%
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34%
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37%
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38%
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Automatic Enrollment and Automatic Savings Increase
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N/A
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14%
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24%
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30%
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35%
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37%
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Employer Match
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73%
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76%
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75%
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72%
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67%
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69%
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"For many 401(k) investors, the 401(k) is their primary retirement
savings vehicle, so it is important that employers continue to make
available plan features that drive better participation, savings levels
and outcomes," said Dean Kohmann, Charles Schwab vice president of
401(k) plan services. "The employers we work with understand this
responsibility as evidenced by some significant increases in features
like automatic enrollment, automatic savings increases, and professional
guidance in the form of target date funds and one-to-one advice."
Schwab Retirement Plan Services, Inc. provides recordkeeping and related
services with respect to retirement plans and is a subsidiary of The
Charles Schwab Corporation.
About Charles Schwab
The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of
financial services, with more than 300 offices and 7.9 million client
brokerage accounts, 1.5 million corporate retirement plan participants,
813,000 banking accounts, and $1.4 trillion in client assets. Through
its operating subsidiaries, the company provides a full range of
securities brokerage, banking, money management and financial advisory
services to individual investors and independent investment advisors.
Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,
www.sipc.org),
and affiliates offer a complete range of investment services and
products including an extensive selection of mutual funds; financial
planning and investment advice; retirement plan and equity compensation
plan services; referrals to independent fee-based investment advisors;
and custodial, operational and trading support for independent,
fee-based investment advisors through its Advisor Services division. Its
banking subsidiary, Charles Schwab Bank (member FDIC and an Equal
Housing Lender), provides banking and mortgage services and products.
More information is available at www.schwab.com.
(0810-5269)
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