More than two-thirds of 401(k) plans have some combination of features — auto enrollment, employer contributions and/or loan availability — that researchers consider to be sources of improved savings and flexibility for participants, said a survey released Tuesday by the Investment Company Institute and BrightScope, a 401(k) analysis firm.
The survey of 53,661 plans with 100 or more participants and assets of at least $1 million found that 67.2% of the plans had at least two or all three of these components in 2013, the last year for which data are available.
“The key takeaway for us is how sponsors combine these features,” said Sarah Holden, senior director of retirement and investor research for ICI, in an interview.
ICI and BrightScope looked at these three factors because auto enrollment and employer contributions are considered among the best practices for 401(k) plans, while loan provisions offer “flexibility” to participants, Ms. Holden said. “According to other research, the availability of loans frees people up to contribute more” to their 401(k) plans, she added.
Eighteen percent of the plans offered all three features, while 43.5% offered a combination of employer contributions and loan availability. Another 3.5% offered auto enrollment and employer contributions, while 2.2% offered auto enrollment and loan availability.
Only 3.4% of plans didn’t offer any of the features. Among the remaining plans, 20.8% offered only employer contributions, 8% provided only the opportunity for participants to take loans from the 401(k) plan and 0.5% offered only auto enrollment.
The survey found that the largest plans — those with assets of more than $250 million — were more likely to offer auto enrollment than other plans. Also, plans with more than 1,000 participants were more likely to offer the three plan design features vs. the other plans.