Robust retirement savings and contribution rates in 2019 likely helped many savers weather the coronavirus pandemic, according to a new report.
More than 90% of eligible employees had a retirement savings account in 2019, and 87.3% of them contributed to the plan — in both cases, the highest rates ever, the Plan Sponsor Council of America found in an analysis of 602 plans at the end of 2019.
In addition, employers contributed on average 5.3% of gross annual pay to their participants’ plans in 2019, which is also a record, PSCA says.
Plan participants, meanwhile, contributed an average of 7.6% of their pay to their retirement plans last year, the council found.
“While the economic and physical impacts of Covid-19 may well weigh on retirement preparations, our results at year-end 2019 suggest that the retirement security prospects of Americans with access to a retirement plan at work were the best it has ever had been,” Nevin Adams, chief content officer and head of retirement research at the American Retirement Association, says in a statement.
The PSCA also found 80% of retirement plans offered a target-date fund last year, up from 68.6% that did in 2018, and 40% offered a professionally managed investment alternative in 2019, up from 36.3% the year prior. Mobile tech adoption is also on the rise: close to 60% of the plans offered access via mobile apps in 2019, up from 36.3% in 2018, PSCA says.
Adoption of annuities and ESG/SRI investments, however, remained low: Fewer than 10% of the plans offered in-plan annuities in 2019, which has stayed the same for several years, PSCA found. And fewer than 3% of the respondents in its survey reported offering an ESG/SRI option in their investment menu, the council says.
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