The recent volatility in the stock markets has once again shifted employees’ focus to retirement savings plans. While saving for the future is important, employees are questioning which options are the most beneficial. The 2011 Compensation Data Services survey results indicate that more than 72 percent of employees are enrolled in a defined contribution plan, similar to 2010 where that number was 71.4. Less than 1 percent of services employers surveyed reported offering a defined benefit plan only, 70.3 percent offer a defined contribution plan only and more than 27 percent offer both.
“Fifty-four percent of employers expected between 25 and 75 percent of their staff to contribute to a retirement plan in 2011 according to an informal poll conducted on the our website,” said Amy Kaminski, director of marketing for Compdata Surveys, the nation’s leading pay and benefit survey data provider. “Another 18.6 percent anticipated more than 75 percent of their staff will utilize retirement plans last year.”
The most common plans for services organizations according to the 2011 survey are 401(k) with employer contribution and 401(k) employee savings only. More than 74 percent of organizations offer a 401(k) plan with employer contribution while 27.7 percent offer 401(k) plans with employee savings only. Nearly 23 percent of companies offered profit sharing plans in 2011, down from 26.2 percent last year.
The way organizations contribute to employee retirement plans varies with 70 percent of organizations utilizing a standard match formula in 2011. Services employers are slowly moving toward tiered matched formulas. Just 9 percent of organizations reported using a tiered match formula in 2009, 10.8 percent in 2010 and almost 14 percent this year.
All 401(k), 403(b) and 457(b) and (f) plans were reported as fully vested within seven years with 23.2 percent vested immediately. For other plans, 9.8 percent of plans were vested immediately while 43.9 percent were vested after five full years of employment.
About the Survey
Compensation Data 2011 Services contains data on more than 425 titles ranging from entry-level to top executives. Data is collected annually from services employers across the country. The results provide a comprehensive summary of pay data, benefit information and pay practices with an effective date of January 1, 2011.
Compdata Surveys is the nation’s leading compensation and benefits survey data provider. Thousands of U.S. organizations provide data each year ensuring the reliability of our results. Compdata Surveys has been providing comprehensive data at affordable prices to organizations from coast to coast since 1988. For further information about the compensation and benefits surveys, contact Michelle Willis at (800) 300-9570.