Workers contributed an average of 8.3% of their salaries to employer-sponsored 401(k)s in 2017, a 10-year high and up from 8% in 2016, according to a recent T. Rowe Price survey.
Participants over the age of 40 were largely responsible for driving up the average pretax deferral rate, with rates ranging from 7.4% for participants ages 40 to 49, to 10.5% for those ages 70 and above, the survey said.
For the first time in the survey's 10-year history, the number of retirement plans with a 6% default deferral rate (32.4%) surpassed the number of plans with a 3% default deferral rate (31.9%).
Also for the first time, target-date funds accounted for the largest percentage of plan assets (41%), surpassing all other investment types. A record 94% of plan sponsors said they offered target-date funds in 2017, up from 93% in 2016.
Other findings from the survey include:
The percentage of participants with an outstanding loan dropped to 23.4% in 2017, down from 23.8% in 2016 and a high of 24.9% in 2013, although the average loan balance increased to $9,184 from $9,037 in 2016.
More than 67% of plans offered Roth contributions in 2017, up from 60.3% in 2016. The total percentage of participants making Roth contributions increased to 6.9% in 2017, up from 6.3% in 2016. Almost every age group showed an increase in the percentage of participants making Roth contributions.
The percentage of plans with auto escalation rose to 75.7% in 2017, from 71.5% in 2016. The percentage of plans with auto enrollment increased to 56.7% in 2017, up from 54.5% in 2016.
"We continue to see the significant impact plan design and financial wellness programs have on participant behavior, as evidenced by the increase in both participation and deferral rates and decrease in loan usage," Aimee DeCamillo, head of T. Rowe Price Retirement Plan Services, said in a news release about the survey results.
The survey results were based on data from 636 plans with more than 1.6 million participants. All of the plans are T. Rowe Price record-keeping clients.