Benefits March 19, 2009

Average 401(k) Deferral up nearly 1% in 18 Years

March 19, 2009 (PLANSPONSOR.com) - Data in a new report show the average contribution to 401(k)-type plans was 7.5% in 2006, unchanged from 2003 but up from the 6.6% in 1988 and 7.1% in 1993.
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class=”2body”> A news release from the Employee Benefit Research Institute (EBRI) said the data also showed that from 1993 to 2006, about 45% of 401(k) participants contributed 5% or less of their salary, while the remaining participants were about equally divided between those who contributed 5% to 10% and those who contributed 10% or more.

class=”2body”> The high contributors-those who deferred 10% of more of their salary-were more likely to contribute a higher amount in 2006 than in 1993, EBRI said.

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class=”2body”> EBRI said the average deferral for 401(K)-type plans for nonagricultural wage and salary workers age 16 and over were:

  • 1998: 6.6%
  • 1993: 7.1%
  • 1998: 7.4%.
  • 2003: 7.5%.
  • 2006: 7.5%.

class=”2body”> The report is based on 2006 data from the U.S. Census Bureau Survey of Income and Program Participation (SIPP), the latest available from SIPP on employee contributions to 401(k)-type plans.

class=”2body”> More information is available at http://www.ebri.org/pdf/notespdf/EBRI_Notes_Feb09.Ret-Partic.pdf .

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