Experts in Personalized Retirement Plan Design & Administration

How Does Your 401(k) Compare?

Many plan sponsors and financial advisors want to know how their 401(k) plan stacks up to the typical or average plan. This is often the first question asked when attempting to determine whether an effort should be made to upgrade the features and benefits of a plan.

To help you answer this question, we have identified some of the common performance characteristics and features offered by many 401(k) plans and compiled the statistics below from a variety of sources* that will allow you to benchmark your plan as of 2017.

Automatic Enrollment

Sixty-sevenĀ (67) percent of plans have an automatic enrollment feature. More than half of plans with auto-enrollment use a default rate of more than 3%, which is up from 40.4% of plans in 2014. Sixty four (64) percent of plans with automatic enrollment automatically increase default deferral rates over time. The most common default investment option is a target-date fund, present in 75.6% of plans.

Of those that don’t have an automatic enrollment feature, 46.1% say they already have a high participation rate and do not feel they would benefit, and 16.8% think it would be too expensive due to increased cost of the match.

Catch-up Contribution

Catch-up contributions for participants aged 50 and older are permitted in 95.2% of plans. Forty-five point six (45.6) percent of these plans offer a match on the catch-up contributions.

Company Stock

Only 11.1% of plans allow company stock as an investment option for both participant and company contributions. Two point four (2.4) percent of plans allow company stock as an investment option for company contributions only.


In 1998, only 24% of plans allowed employees to begin contributing to their 401(k) plans immediately upon employment. Now, 66% do so. Seventy-four percent (74) of companies that provide a matching company contribution provide immediate eligibility to receive the match, while 20% require one year of service prior to eligibility to receive it.

Employee Participation Rate

On average, 87.6% of eligible employees have a balance in the plan. Twenty-two point five (22.5) percent of plan participants are no longer actively employed by the plan-sponsoring company.

Employer Contributions

The average company contribution in 401(k) plans is 4.7% of pay. Numerous formulas are used to determine company contributions. The most common type of fixed match, reported by 38.9% of employer’s match $.50 per $1.00 up to a specified percentage of pay (commonly 6%). Thirty-five point one (35.1) percent of all plans match $1.00 per $1.00 up to a specified percentage of pay. Over 40% of employees said the company match was the primary reason they participate in the plan.

Hardship Withdrawals

Hardship withdrawals are permitted in 83.8% of 401(k) plans.

Investment Advice

Investment advice is offered by 35% of respondent companies. Twenty three (23) percent of participants used advice when it was offered.

Investment Advisors

Sixty-six point eight (66.8) percent of companies retain an independent investment advisor to assist with fiduciary responsibility.

Investment Options

The number of funds offered to plan participants has leveled off after many years of steady increase. Plans offer an average of 19 funds for both participant contributions and for company contributions. Assets are most frequently invested in actively managed domestic equity funds (21.4%), target date funds (19.8%), indexed domestic equity funds (12.4%), stable value funds (8.1%), and balance funds (6.5%).

Investment Policy Statement

Eighty-two point five (82.5) percent of all plans have a written investment policy statement.


Loans are permitted in 82.8% of 401(k) plans. Eighty six (86) percent of plans that allow loans permit only one loan at a time. Ninety point one (90.1) percent of plan that allow loans charge some type of loan fee. Twenty-three (23) percent of all 401(k) participants who were eligible for loans had loans outstanding against their accounts. On average the borrowed amount was 20% of their account balance. 56.7% of plans permit only one loan at a time.

Roth 401(k) Feature

Seventy (70) percent offer a Roth feature and 6% are considering offering it in the next 12 months. The primary reason cited for implementing a Roth was to maintain a competitive plan. When offered the opportunity, 23% of participants made Roth contributions.

Roth Conversion Option

Thirty six (36) percent of plan sponsors offer in-plan Roth conversions. When asked why in-plan Roth conversion has not been introduced to date, the leading reason was “not enough interest.”

Self-directed Brokerage Accounts

Self-directed brokerage accounts are offered in 35% of plans.

Safe Harbor Plan Design

Forty- four (44) percent of plans have a Safe Harbor plan design in lieu of ADP/ACP testing.


Forty (40) percent of plans provide immediate vesting for matching contributions. Of these, 62% feel it was an effective retention tool.


* The most current studies and reports available have been used to compile the information. The following is a list of source material:

  • “59th Annual Survey of Profit Sharing and 401k Plans,” published by Plan Sponsor Council of America
  • “Annual Defined Contribution Benchmarking Survey,” published in 2017 by Deloitte Consulting
  • “Ready! Fire! Aim?,” published in 2015 by J.P. Morgan Asset Management





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