Although a majority of sponsors offer 401(k) plans or other defined contribution plans to employees, a minority offer these retirement savings opportunities to part-time workers, said a report published Wednesday by the Transamerica Center for Retirement.
In a survey of 1,022 employers, Transamerica found 74% offered DC plans, but only 38% of them extend the plans to part-timers.
Larger employers — those with 500 or more workers — had the highest rate of offering DC plans to part-time workers (58%), followed by employers with 100 to 499 workers (50%) and employers with fewer than 100 employees (34%).
“In the current public policy dialogue on how to increase workplace-based retirement savings among American workers, providing coverage to part-time workers is a tremendous opportunity,” said the report describing the survey.
Employers should “seek expertise of retirement specialists familiar with plan design” on how to best expand coverage to part-time workers, the report said.
The report also noted that company size matters for 401(k) plans offering auto enrollment. The overall rate was 21%, but 41% of larger companies offered auto enrollment. The report said 28% in the 100-499 employee group enacted auto enrollment vs. 18% for the smallest employers.
Auto escalation was offered by 28% of all employers, 43% of the largest companies, and 26% each for the other categories.
Harris Poll conducted the online survey among a nationally representative sample of employers from mid-September to early December, the report said. The Transamerica Center for Retirement is a division of the Transamerica Institute, a non-profit private foundation that receives contributions from Transamerica Life Insurance Co. and its affiliates, and it may receive funds from unaffiliated sources, the report said.
