Employers Display Steady Commitment to Providing 401(k) Features that Engage Employees and Drive Positive Behaviors
Public Company Information:
SAN FRANCISCO--(BUSINESS WIRE)--According to new data* from Charles Schwab, a 401(k) provider to approximately 1.5 million company retirement plan participants, employers remain focused on engaging their employees in retirement savings and providing 401(k) plan features that help drive positive savings behaviors. Through the end of 2009, 70 percent of plans serviced by Schwab made 401(k) investing advice available to participants, up from 62 percent in 2008, and 68 percent of plans offered target funds compared to 65 percent in 2008. In addition, 35 percent of employers were automatically enrolling employees in their plan, up from 33 percent in 2008.
Employee participation and savings rates both held steady from 2008 to 2009 according to initial Schwab data. 2009 plan participation rates remained at an average of 74 percent, and 2009 participant savings levels held at an average of approximately seven percent.
“People are emerging from the market downturn with a newfound respect for the importance of saving and retirement readiness,” said Dean Kohmann, vice president of 401(k) plan services for Charles Schwab. “Despite the fact that employers have understandably become more cautious about adopting 401(k) features that can increase plan costs, our plan sponsor clients remain focused on providing employees with the resources and tools they need to make informed decisions and meet their retirement savings goals.”
Additional highlights from Schwab 2009 plan data covering more than 1000 plans and 1.3 million participants include:
“Of all the features provided in a 401(k) plan, access to advice can be one of the most powerful resources for helping people meet their savings goals,” noted Kohmann. “For example, among the retirement plans we serve at Schwab, approximately 70 percent of participants that receive and implement 401(k) advice make a change to their deferral rates, and we see those savings rates nearly double on average as a result, jumping from five percent to 10 percent of pay.”
About Charles Schwab
The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 7.8 million client brokerage accounts, 1.5 million corporate retirement plan participants, 753,000 banking accounts, and $1.4 trillion in client assets as of Feb. 28, 2010. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Named "Highest in Investor Satisfaction with Self-Directed Services" by J.D. Power and Associates in 2009, its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender) provides banking and mortgage services and products. More information is available at www.schwab.com. (0310-2115)
*2008 data is based on December 31, 2008, data for 1,026 overall Schwab plans averaging 1,176 participants. 2009 data is based on December 31, 2009, data for 1,062 overall Schwab plans averaging 1,167 participants. Estimated 2009 participation and savings rate results are based on a sample of 200 401k plans.