2023
DC Plan Benchmarking Survey

Contributions

Forty-four percent of defined contribution plans provide employer contributions without necessitating participant deferrals. In contrast with matching contributions, which are exclusive to actively deferring participants, nonelective and profit sharing contributions benefit all employees. The most common contribution approach involves a “pro rata” profit sharing plan, where each participant receives an allocation proportional to a uniform percentage of the person’s compensation. Fifteen percent of plans have adopted the safe harbor contribution, enabling them to offer employees a minimum savings amount without undergoing annual discrimination testing. This diverse landscape of contribution structures reflects the flexibility and strategies utilized by employers in managing DC plans.