401(k) Stats 2011: Benchmarks for Plan Sponsors

By Oct 14, 2011

The not-for-profit Plan Sponsor Council of America (PSCA) released its 54th Annual Survey of Profit Sharing and 401(k) Plans in October 2011, reporting on the 2010 plan year experiences of 820 defined contribution plans with 10.5 million participants and more than $691 billion in plan assets. Plans in the survey represent companies of all sizes and regions across the United States.

The findings demonstrate the growth of target-date funds and Roth 401(k) options, showing that participant use of both, when available, has increased significantly:

  • Target-date funds were offered as an investment option by nearly two-thirds of plans in 2010, with an average of 13 percent of plan assets invested in them, up from 10 percent of assets in 2009.
  • A Roth 401(k) option using after-tax employee contributions (with tax-free future distributions) has become increasingly available—45.5 percent of plans offered one, up from 18.4 percent in 2006.

“Recently, added design features are proving popular with participants,” said David Wray, PSCA president. “More of them are taking advantage of the employer-provided investment allocation programs and diversifying their tax advantages.”

Below are highlights from the survey:

Asset Allocation

Participants’ assets are most frequently invested in:

Actively managed domestic equity (stock) funds

25.1% of assets

Target-date funds


Stable value funds


Indexed domestic equity funds


Actively managed international equity funds


Automatic Enrollment

41.8 percent of plans have an automatic enrollment feature. Of those plans that have it, 82.3 percent use it exclusively to enroll new hires. Only 17.7 percent use it annually to enroll currently employed nonparticipants who do not opt out. The most common default deferral is 3 percent of pay, and the most common default investment option is a target-date fund.

Company Contributions

Profit-sharing plans tend to offer the most generous employer contributions, averaging 6.8 percent of an employee's pay. The average company contribution in 401(k) plans is 2.3 percent of pay and in combination plans it is 4.6 percent of pay.

Company Stock

14.7 percent of plans allow company stock as an investment option for participant and employer contributions, and 3.2 percent of plans allow company stock as an investment option for employer contributions only.

Employee Eligibility 

89 percent of U.S. employees at respondent companies are eligible to participate in their employer’s defined contribution plan. Most companies allow employees to begin contributing to the plan immediately on hire (59.2 percent of companies). Companies are more likely to have a one-year service requirement for nonmatching employer contributions than for matching employer contributions.

Hardship Distributions

Hardship withdrawals are permitted in 89 percent of 401(k), 85.8 percent of combination and 4.5 percent of profit-sharing plans. Only 1.9 percent of participants took a hardship withdrawal in 2010 when permitted—the same percentage as in 2009.

Investment Options

Plans offer an average of 18 funds for participant and company contributions. The funds most commonly offered to participants are actively managed domestic equity (stock) funds, actively managed international equity funds, indexed domestic equity funds and actively managed domestic bond funds.

Investment Advisors

67.9 percent of companies retain an independent investment advisor to assist with fiduciary responsibility.

Investment Advice

Investment advice is offered by 57.6 percent of respondent companies; 22.3 percent of participants used advice when it was offered.

Loan Availability

Loans are permitted in 88.8 percent of 401(k), 89.4 percent of combination, and 23.8 percent of profit sharing plans. 52.8 percent of plans with loans permit only one loan at a time.

Loan use has not changed much in the past 10 years and remains at about 24 percent of eligible participants.


The average percentage of eligible employees who have a balance in the plan is 86.3 percent. An average of 76.9 percent of eligible employees made contributions to the plan in 2010, when permitted.

Roth 401(k)

45.5 percent allow participants to make Roth after-tax contributions; 16.1 percent of participants made Roth contributions when offered the opportunity.

Target-Date Funds

63.6 percent of plans offer a target-date fund as an investment option. The average allocation of plan assets increased 30 percent from 2009 to 13.0 percent.

Vesting Schedules

37.3 percent of plans provide immediate vesting for matching contributions, while 23.3 percent provide immediate vesting for profit-sharing contributions.

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