Newest 401 (ok) Benchmark Report Reveals Most Aggressive Retirement Plans
What you need to know
- The report examines the overall performance of 401 (k) plans for 27 industries across eight metrics.
- The performance of 401 (k) plans can vary significantly by industry and company size.
- Overall, plan assets increased by 20% compared to the previous year.
The performance of 401 (k) plans can vary significantly by industry and company size. Judy Diamond Associates, as well as ThinkAdvisor, a division of ALM Media, recently produced its fifth annual 401 (k) Benchmark Report, which examines the overall performance of 401 (k) plans for 27 industries across eight different performance metrics.
“For consultants, this report is an opportunity to have a meaningful discussion with your customers about the state of their plans,” said Eric Ryles, vice president of customer solutions, Judy Diamond Associates.
“For sponsors, these benchmarks provide an unbiased view of your industry and help you determine whether your plan is competitive within your peer group,” said Ryles. “It can also help you take the right steps to deliver positive retirement results to your employees.”
In all industries, the plans gained approximately $ 1 trillion in value, representing a 20% year-over-year increase in plan assets.
Actual participation rates remain around 81%, taking a breather after several years of growth led by the widespread introduction of automatic enrollment options.
Total contributions from employees and employers increased by about 8% year-on-year, although due to the slight decrease in median contributions, the data mean that more people participate than ever before, although their savings rate remains about the same.
The report classified industry groups according to average account balance, participation rate, yield, employee contributions, employer contributions, plan number of points and employee lifetime.
The top 10 industries for retirement planning include industries that you expect to do well. However, the report’s insights into other industries might come as surprising, as might the performance metrics of a competitor’s plan.
Financial advice and investment activity. This group is characterized by its extremely high employee and employer contribution rates, which makes sense given that the average wage for someone in this industry is likely to be significantly higher than that of most other industry groups.
Since most employer funds paid into a plan are structured as a match with employee contributions, there is a strong correlation between these two data points.
Certified accountants. The average balance of all CPA firms is $ 126,614, which puts them approximately $ 3,000 in front of attorneys and $ 5,000 in front of financial advisors. It should also come as no surprise that these companies have some of the longest-serving employees, the highest over-plan health scores, and the most contributions per participant.