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Some Of The Trends In The 401K Retirement Plan

401K plans have become the default retirement plan. The 401K industry has been taking steps to improve and help increase the chances of a virtuous retirement for more people. 

401K plans have been changing for the better in recent years, and the costs and expenses of these plans have decreased. You can also avail 401K compliance services via

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Some of the current trends in the 401k retirement plan are:

  • Simpler plans, these types of plans result in higher participation rates and better investment options for most employees. Simpler plans result in higher participation rates and higher investment rates for employees. 
  • Automatic enrollment. This is growing rapidly and increases enrollment rates and plan success measures. Default contribution rates are typically 3% + of salary initially.
  • Target date diversified retirement funds are used as the default option for employees rather than a stable value or money market option.
  • Increased employer/owner concern about retirement plan costs and expenses and fiduciary responsibility (funds, fees, compliance, diversification, plan design, etc.)
  • Increased willingness and ability to provide investment education and advice to participants from advisers and providers thanks to the 2006 Pension Protection Act.
  • Companies are interested in obtaining more investment advice and education in person rather than written materials, online tools, or phone resources.
  • Early access to plans. 49% now offer immediate eligibility to new hires (instead of requiring 1 year of employment).

401k plans are definitely getting better and moving in the right direction to help people increase their chances of success in retirement.