PERSONNEL MATTERS: 401(k) balances hit record, but…

By Jerry Geisel, Crain News Service

CHICAGO (June 1, 2015) — Employees' 401(k) plan account balances and participation rates both hit records in 2014, according to a new analysis, but employers should make an effort to make saving and investing easier.

The Aon Hewitt analysis found that the average participant account balance hit $100,320 at the end of 2014, up sharply from $91,060 a year earlier, while the employee participation rate hit 79 percent. That's the highest level since the Lincolnshire, Ill.-based consultant firm began such tracking such information in 2002.

In addition, 24 percent of 401(k) plan participants increased their contribution rate in 2014.

On the other hand, only 15 percent of participants rebalanced their 401(k) plan investment portfolio, making it one of the lowest trading years on record, according to Aon Hewitt.

“In the last decade, employers have made strides in helping workers prepare for retirement by adding plan features that make saving and investing easier,” Rob Austin, Aon Hewitt's director of retirement research in Charlotte, N.C., said in a statement.

“At the same time, employees continue to take a passive role in managing their 401(k) plans. Employers can nudge workers in the right direction by providing more robust products, tools and resources,” Mr. Austin added.

The analysis, released May 28, is based on 138 defined contribution plans, with 3.5 million eligible participants.

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This report appeared on the website of Business Insurance magazine, a Chicago-based sister publication of Tire Business.