Charles Schwab Data Reveals Increase In 401(k) Plan Participation

(Published November 2, 2009)

 

Charles Schwab released new data showing the number of workers participating in 401(k) plans increased even as the stock market declined and the economy weakened. 

 

According to data taken from retirement plans serviced by Schwab, overall 401(k) plan participation increased four percentage points through the end of 2008, in the middle of the financial crisis, to 77% from 73% at the end of 2007.  The participation rate jumped even higher, to 84% from 77%, among plans that offer automatic enrollment programs.

 

In addition, most 401(k) plan participants continued to receive matching contributions from their employer.  As of July 31, 2009, only 9% of employers stopped making matching contributions, according to the Schwab data.

 

"Our plan sponsor clients tell us that the employer match is one of the most important 401(k) plan features for employees, and eliminating it is a last resort even in difficult economic times," said Robyn Alcorta, vice president of 401(k) client services for Charles Schwab. "Matching employee 401(k) contributions is important in keeping the 401(k) benefit competitive and driving high participation and savings rates, and employers tell us that these factors lead to a more productive and loyal workforce."