Defined contribution plans are doing more to make sure their participants can have financial security in retirement, according to a survey from Aon Hewitt.
According to the survey, 2013 Trends & Experience in Defined Contribution Plans, 76% of defined contribution plans now offer immediate eligibility to employees, up from 71% in 2011. Only 55% of employers offered immediate eligibility in 2003.
Fifty-three percent of employers reported allowing immediate eligibility for employer-matching contributions in 2013, compared to 52% in 2011 and 39% in 2003.
Rob Austin, director of retirement research at Aon Hewitt, said in a telephone interview that more employers are recognizing that their employees depend solely on their DC plans for their retirement income. According to the survey, 77% of employers stated the DC plan is the primary retirement income plan.
“They're allowing people to enter the plan immediately and giving them a match immediately, and these are things that were unheard of a decade ago,” Mr. Austin said.
Mr. Austin said since there is so much more money going into defined contribution plans, perhaps the biggest change over the past several years is providing access to financial professionals to more employees.
Seventy-two percent of plans offer personalized investment advisory and education services in 2013, compared to 54% in 2005, the first time the survey gave that response as an option.
The survey was completed earlier this year by more than 400 executives at defined contribution plans with a total of just less than $500 billion in assets.